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FSA making life harder for itself

We have always argued that the FSA is making a big mistake in killing off polarisation at a time of such uncertainty.

But if it must do this foolish thing – and change has been inevitable for more than 12 months now – then the latest package of measures is as good as any other.

We now know that multi-ties are to be allowed, with no restrictions on the numbers of ties. IFAs must cover the whole market and have a fee option. Better than best goes, which will lead those IFAs who have not taken the product provider shilling muttering about pay and pipers.

To allay the worst fears, there is a sensible provision to prevent providers setting a target for business flows from IFAs in which they have invested. A ban on override is to be extended to multi-ties.

Sensibly, white-label deals are not allowed but instead any adoption must involve co-branding.

Businesses can be split into tied, multi-tied and independent options although advisers cannot switch hats mid-transaction. This will be welcomed by some of the bigger IFAs which are considering a split.

Multi-ties can also go beyond their usual ties if they can&#39t find an appropriate product. This has some merit but risks brokers straying beyond their competence.

Sandler&#39s recommendation for IFAs alone to retain the adviser title, with all the rest called salesmen, has been discounted. The idea was harsh on the best of the tied side but not on the worst.

All this adds up to a liberalisation on paper. But we fear that the FSA has actually made life a lot harder for itself. It may have to get more hands on, not less, and we do not know if the organisation can cope.

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