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Define business to avoid &#39remedies&#39

Is defined payment the weakest link in the FSA&#39s CP121 proposals? It appears so. Managing director John Tiner says the FSA is considering other options. David Severn apparently puts its survival at 50-50. At the G80 conference last week, 80 per cent of those present believed it would be modified. And we hear the Treasury&#39s reviewer-at-large Ron Sandler, has serious concerns.

Perhaps the most vexatious of the FSA proposals will be dropped. So are IFAs out of the woods? No. The FSA is still obsessed with commission bias and will try to do something about it and the vocabulary of the argument is still unfavourable. IFAs in the FSA&#39s eyes are still greedy middlemen so something equally unpleasant may follow. CP121 remains flawed in many of its assertions. The FSA needs to take an honest look at its own numbers. If IFAs have a much greater market share -some insurers put it at half, if IFAs rebate a large proportion of that commission, if polarisation actually encourages new entrants then remedies based on CP121 will be curing problems that do not exist and missing problems that do.

But at least IFAs may, and we stress, may, have a choice between staying independent or multi-tying rather than opting for pseudo independence as an authorised adviser.

We hope, as always, they choose independence. But if the threat of defined payment is lifted, IFAs should learn from the fact it was nearly introduced and broaden their income streams to include more trail commission and fees and wean themselves off reliance on up-front commission. Then IFAs will be better able to withstand the next “remedy” put forward by regulator or reviewer.


The roots of the pension scandal

The amazing saga of the pension scandal was the most outrageously imposed retrospective legislation one has ever seen.But regulators conveniently overlooked Mrs Thatcher&#39s Government&#39s advertising campaign of an imitation Hulk breaking out of chains strapped around him, advising the public to break out of the restrictive chains of an occupational pension scheme and organise their […]

Newton acquires Henderson subsidiary

Mellon subsidiary Newton has acquired Henderson Private Asset Management for an undisclosed sum.The deal, which both companies expect to complete in August, will raise Newton&#39s private client and charities funds under management by 25 per cent to around £5bn from £4bn.HPAM manages around £930m of funds on a discretionary basis for 1,000 high net-worth clients, […]

A consumer&#39s view – Lorna Bourke

There is an old saying that the conduct of the chief executive sets the tone of how business is done throughout an entire company. This is true of the Government, too.Nowhere is this more evident than in the totally expedient and unprincipled way in which depolarisation is being pushed through by Blair&#39s yes men as […]

Website to cut service costs for IFAs

Software company CCL is setting up an IFA website that provides a range of services at a reduced cost or free of charge.The website offers IFAs access to calculators for pensions, investments, tax and mortgages and provides generic illustrations on the costs of products at also allows IFAs to print reason-why letters,the latest FSA […]


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