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FSA is &#39bemused&#39 by IFA opposition and plans direct approach

The FSA is set to bypass IFAs and take its arguments for scrapping polarisation direct to consumers, according to fee-based IFA and consultancy Baxter Fensham.

After a meeting with FSA head of polarisation review David Severn, Baxter Fensham directors John Baxter and Giles Pidcock say the regulator is “bitterly disappointed, frustrated and bemused” over the response to CP121 from the overwhelming majority of IFAs.

Baxter Fensham says Severn hoped the proposals would increase the professionalism and consumer perception of the independent sector but the reaction from IFAs may stop him discussing details of the review with the industry.

It warns fellow IFAs now risk “marginalising themselves” by not having a constructive dialogue with Severn and thinks his next move may be to win over the public through bodies such as the Consumers&#39 Association which he met last week.

Baxter and Pidcock claim Severn was willing to discuss their opinions, in particular their reasons for saying renewal commission is essential in building long-term client relationships providing it is clearly disclosed.

Baxter Fensham believes CP121 is good for small, quality IFAs but networks face a big problem and will have to become authorised financial advisers as their compliance structure is geared around justifying what policies are sold and how commission is paid.

Baxter says: “David Severn is bemused by the response from IFAs. My personal opinion is if he feels they will not enter into constructive dialogue he may decide to take the proposals directly to the consumer to build support.”

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