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Editorial: Put yourself and consumers first

The FSA&#39s spin-doctored announcement on the axing of polarisation has as its heading: “Consumers put first in proposed reform of financial advice”.

This is simply not true. A more accurate heading would be “Consumers put last as overwhelming demand for IFAs ignored”.

The lunatics have taken over the asylum but most IFAs realised that long ago.

The changes will confound consumers, with possibly five or six levels of adviser. Better than best is not reformed, it is dumped and providers and IFAs are effectively encouraged to seek investment from providers. The dash for distribution can only accelerate, with multi-ties sapping entrepreneurship from distribution.

The regulator says commission bias exists although it exonerates panels from the accusation that they are de facto multi-ties. Intriguingly, it also says the 1 per cent world has excluded consumers from advice.

This is not a death warrant for IFAs. On the commission reform, IFAs can take a fee from the commission and rebate the rest. It may be the one sensible move but only if multi-ties, now known as distributor firms, are not given a regulatory licence to fleece consumers. It is also essential that those who wish to remain independent are allowed time to adapt. Finally, the new proposals bizarrely lack any explanation of how the new system would avoid a repeat of Equitable Life or pension misselling.

Our position, as always, is that we will not condemn readers who choose to multi-tie but we believe that as many people as possible should get access to IFAs.

In the coming months of turmoil, Money Marketing has this advice for its readers: Be selfish on behalf of two groups of people – yourselves and your clients.


Cap Gemini warns of recreating system flaws

A consultant at the heart of the FSA&#39s polarisation rev-iew has hit out at the pla-nned regime, saying it could have significant adv-erse impact on both consumers and the industry.Cap Gemini Ernst & Young vice-president Shaun Crawford says the proposals are in danger of recreating many of the present flaws in the system and there […]

IFAs snub Investlife bond

IFAs have criticised Investlife&#39s high-income bond, saying they will not recommend it as returns are linked to the worst performing of eight stockmarket sectors.Investlife&#39s premier income and growth bond is being marketed as ideal for risk-averse investors as its capital return is linked to eight Dow Jones Europe Stoxx sectors.But IFAs say this claim is […]

New Life for IFAs

Few companies can claim to have been shortlisted for the Money Marketing award for best use of new media three years in a row. Scottish Life has exactly that distinction, having collected the full set of silver, gold and bronze awards in 1999, 2000 and 2001 respectively.As I mentioned at the end of last year, […]

7% yield offered on Swip property fund

Scottish Widows Investment Partnership is to offer a property fund next month, offering investors a gross yield of 7 per cent a year.The UK balanced property trust will be an investment trust listed on the London Stock Exchange. The offer period is set to run from February 11 to March 20.Swip is looking to raise […]

Benefits - thumbnail

Global benefits predictions for 2015 from Jelf International

According to Doug Rice, managing director of international services, in 2015, managing their international duty of care will become an increasing focus for UK-based overseas organisations in both managing their short- and longer-term challenges. As a result, strong independent advice and innovative technological solutions will become more important than ever in managing their global benefits.


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