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FSA hints at retention of WOM/independence link

The FSA has given another strong hint that independence will indeed mean whole of market rather than the radical suggestion in the retail distribution review that its meaning may be redefined.

Speaking on a webcast on the Chartered Insurance Institute’s specialist RDR page, head of the RDR Amanda Bowe said she wanted to emphasise that it was a question the RDR was asking, rather than a formal policy suggestion, and admitted industry responses to it had been “very consistent”.

This follows comments made by Bowe in a speech earlier this month where she said the FSA “may well end up” retaining the link between independence and whole of market.

The FSA has pointed out from early on in the consultation period that it was aware redefining independence would not be a popular move but in a speech in July director of small firms Stephen Bland questioned whether critics had “thought deeply enough” about the issue.

In a wide ranging interview, Bowe said it was not the FSA’s intention to force advisers out of the industry through increased costs associated with new prudential rules and training but acknowledged that this could be the case for some.

Bowe’s interview, along with other RDR interviews including one with Money Marketing editor John Lappin can be found here:
http://eflyer.cii.co.uk/HTMLPages/rdr25092007113521416.htm>

Bowe said: “There are other areas such as independence which has been a particularly thorny issue and we know that independence is a very important brand to financial advisers and particularly those who spent any years building up that as a brand in their business.

“We asked a question about whether or not that independence should still mean that advisers would have to offer products from the whole of the market which is currently the case and people have tended to pick up on that as being a very radical question. I do want to emphasis that that was a question we asked and we are certainly getting very consistent responses to it.”

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