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Four-way split looming as retail review row rages on

Last-minute arguments are still raging within the FSA over the final draft of the retail distribution review, with the market set to segment four ways and doubts hanging over the future of the IFA tag.

Sources close to the RDR say a draft paper, which is understood still not to have been finalised, proposes scrapping the term IFA and categorising the market into four segments – holistic generic advice, simple advice, general advice and professional.

Mid-market advisers would fall into the general category and, under new requirements, be forced by the regulator to move towards more transparent charging structures reminiscent of factory gate pricing.

One source suggests there is a concern that regulatory pressures will force mid-range advisers to become professional financial planners or simplified advisers within a two-year window, resulting in a polarised advice market. Other sources believe the FSA will use regulatory incentives rather than force to increase professionalism but it will demand transparency.

It is also understood that proposals will appear in the discussion paper to significantly raise the capital adequacy level for advisers from its current £10,000 to as much as £50,000.

Ernst & Young head of insurance sector Shaun Crawford says: “It is not a threat to advisers themselves but it is a threat to the term IFA.”

FSA spokeswoman Sam Bennett says: “We cannot comment on what is in the retail distribution review at this stage. But we would say that the proposals put forward in the discussion paper are industry-led solutions which have been suggested by the five working groups.”

See Review Preview. Full coverage of the RDR next week, see moneymarketing. and Money Marketing TV


Pensions Regulator issues landmark ruling to Sea Containers

The Pensions Regulator has ordered Sea Containers to inject at least £90m into its pensions funds or face court action in a landmark move.The regulator has used it powers under the 2004 Pensions Act to issue its first financial support direction to Sea Containers in a move which pensions experts are calling an historic day […]

CI industry still failing to gain consumer trust

Any consumer trust gained over the past year by the critical illness industry has been undermined by bad claims publicity and unhelpful comments from the ombudsman according to Defaqto. Defaqto says the CI industry did not capitalise on the opportunity to promote the Association of British Insurers’ statement of best practice and left many advisers […]

FTSE goes global with index ad

The FTSE is running its first global advertising campaign using the strapline, FTSE – It’s how the world says index.The campaign’s objective is to position the FTSE as the definitive benchmark, focusing on its dedication to the needs of investment professionals. It also hopes to promote the message that FTSE is about more than just […]

Is this the endgame for the current mergers & acquisitions boom?

Last year, worldwide mergers and acquisitions (M&A) rose to an unprecedented $4.7tn, according to Thomson Reuters, a 41 per cent increase over 2014. Anthony Forcione, senior equity analyst at Loomis Sayles, an affiliate of Natixis Global Asset Management, looks at what’s been driving this particular wave of mergers. Click here to view full article: Loomis-Sayles


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