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FSA says proposals won&#39t spark IFA shift to multi-ties

The FSA is predicting that very few, if any, IFAs will decide to go multi-tied as a result of its proposals in CP166.

Although not providing any further details on numbers, head of retail projects David Severn says the regulator&#39s research shows that most IFAs want to retain their independence, with most multi-ties likely to come from the tied sector.

The FSA acknowledges that if a large percentage of the IFA community becomes multi-tied, it would represent a significant adverse step but says this is unlikely.

It also predicts that up to a quarter of providers will adopt other providers&#39 products to fill a gap or imp-rove a weak product in their own range.

IFAs agree with the estimates, saying there is no longer any financial motivation to go down the multi-tied route, given that advisers will be able to accept funding from providers without having to tie.

Standard Life managing director of UK sales Feilim Mackle says: “Why would an IFA change their business practice? If an IFA has a good relationship with a provider and their clients, they are very unlikely to go multi-tied.”

Sofa chairman Nick Bam-ford says: “I would not have thought that, as a result of CP166, many IFAs would opt to go multi-tied as there does not appear to be any financial motivation for it anymore.”

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