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Fee switch favours multi-ties

IFAs will have to charge fees agreed with clients in advance instead of being paid commission if they wish to remain “independent” under the FSA&#39s proposals.

But multi-tied advisers will not be subject to these rules, which IFAs say are unfair and anti-competitive.

To eradicate commission bias, the FSA says independent advisers will have to use a defined payment system agreed in advance with the client. This can be a fixed total charge, a retai-ner fee, an hourly rate or an annual percentage of funds.

IFAs must then rebate commission, offset it aga-inst fees and pay excess commission directly to the consumer.

Britannic Retirement Solutions head of corporate affairs Jim Boyd says: “These changes should give IFAs a fair fee for a fair piece of work. But we do not want to see commission bias transferred to multi-ties.”

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