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‘Don’t force IFAs through factory gate’

Skandia has hit out at the Association of British Insurers over its call for regulatory intervention to move advisers to factory gate pricing.

Skandia says it supports improving transparency of charges but the market is already heading in this direction and extra regulation could be damaging.

Head of UK marketing Billy Mackay says recent research by Skandia among over 500 advisers found that 55 per cent expect the amount of remuneration received from pure fees to increase in the next year, showing a real appetite for this option.

Skandia has offered a fee deduction agreement on pensions for four years. It says 69 per cent of advisers that are remunerated by some form of commission opt for this rather than traditional commission.

Mackay says regulatory intervention could have the opposite effect of driving IFAs into more commission-based types of distribution.

He also says HM Revenue & Customs should not launch a crackdown against factory gate pricing in a mistaken belief that popularity equates to potential for abuse.

Mackay says: “The industry is already heavily regulated and this proposal from the ABI would make things worse. The evolution is already happening and I do not think regulatory intervention is the answer.”

SimplyBiz chairman Ken Davy says: “The IFA sector is on a journey towards increased professionalism but the great danger of the review is if it tries to force the pace in a process that is already happening.”

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