View more on these topics

Flight says multi-ties will damage consumers

Multi-ties will result in investors being sold expensive, ill-suited products because multi-tied agents will not offer best advice, according to Shadow Paymaster General Howard Flight.

At the Financial Services Forum, Flight told Treasury economic secretary Ruth Kelly that the FSA&#39s proposals will damage consumers across the spectrum.

He said the middle-classes will lose out because tied agents will go multi-tied and sell products with the highest commission as they will not be obliged to offer best advice as IFAs are. Clients of IFAs will not benefit because they will be forced to pay fees, despite many preferring to pay commission for tax purposes, claimed Flight.

He said: “The proposals are going to cause infinitely greater problems than those they are seeking to address. Multi-tied agents will have no obligation to offer best advice, so you will run the risk that the great majority of people in the middle-classes will be sold more expensive products than need be the case.

“And then you have the ridiculous nonsense that IFAs have to charge fees even though most of their clients would prefer to enter into commission arrangements.”

Liberal Democrat trade and industry spokesman Vincent Cable said his greatest concern is that there will be no one left who can genuinely be considered to be independent.

He said: “You may shake up the industry and it may be more efficient but if you create an environment where there is nobody who can genuinely be said to be an independent financial adviser, then I think you have really lost something.”

Kelly said the matter was primarily one for the FSA to deal with but she claimed there is a compelling case for reform because of the lack of transparency in the industry.


Royal & SunAlliance International Financial Services – R&SAIM European Balanced Yield Bond Fund

Wednesday, March 27, 2002Type: Offshore fundAim: Income and growth by investing in investment grade and highyield bondsMinimum investment: Lump sum £15,000Place of registration: Isle of ManInvestment split: Investment grade bonds 50%, high yield bonds50%Yield: 8.5% gross a yearIsa link: NoCharges: Initial 0.5% a quarter for six quarters, annual 0.8% for firstfive yearsCommission: Initial 5%Tel: 01624 […]

BDT global trust looks through emerging markets lense

BDT Investment Management, a boutique investment house established in 2000, has introduced the establishment investment trust. This aims for capital growth through a portfolio of global shares, fixed interest securities and hedge funds.The trust was designed as a rollover vehicle for a Luxemburg-based Sicav. It will not have a benchmark, so there are no specific […]

Fidelity pinpoints Isa blunders

Fidelity has compiled a list of the most common Isa application errors to help IFAs ensure that last-minute investments are processed trouble-free.It says that 18 per cent of Isa application forms received by it and FundsNetwork have one or more error and cannot be processed automatically. Fidelity says the end of the tax year is […]

&#39Time right for high-yield bonds&#39

Stockbroker Killik & Co bel-ieves it is a good time to invest in high-yield corporate bonds but is recommending that investors should invest through investment funds rather than directly.It says gilts and high-quality corporate bonds have outperformed equities in recent years. But Killik expects interest rates will remain low, meaning it is a good time […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm