Two contradictory directives are being discussed by the European Union, with one aiming to bring the UK financial services sector into line with Europe and another hindering any proposed changes.
The information and consultation directive being debated this week in Strasbourg is expected to be agreed by all member states, including the UK, by the end of the year.
It will force employers to discuss any changes to their organisation with employee representatives before being implemented.
City law firm Stephenson Harwood says this gives all financial advisers, including IFAs, the power to prevent or at least slow down structural changes and may make it difficult for the FSA or Treasury to remove polarisation and introduce new structures such as multi-ties.
But the insurance mediation directive, which should be adopted by the European Parliament next year, states: “A clear, common approach to the rules on intermediaries is essential in order to guarantee freedom of cross-border insurance services and to maintain protection of insurance customers at a high level.”
Co-operative Bank Financial Advisers director David Cox believes this will encourage a multi-tie structure in the UK to make it more like the rest of Europe.
This directive highlights the need to include all sizes of companies, suggesting it is “small intermediaries which can pose problems for the protection of insurance customers”.
National IFA Inter-Alliance spokesman Charles Ansdell says: “The consultation directive means any restructuring of job roles could be met with a lot of resistance.”
Stephenson Harwood managing partner Tom Flanagan says: “Large IFA firms will have to face the prospect of employees getting collectively organised to resist changes.”