The FSA is set to amend the defined payment system to one which is more acceptable to the majority of IFAs, allowing more to retain their independence and scrapping authorised adviser status, according to head of the polarisation review David Severn.
It is thought that plans for all other aspects of polarisation including allowing multi-ties will be retained.
Severn, speaking at the “Distribution post Sandler” conference in London today, told delegates the category of authorised adviser is to be scrapped.
Severn said: “The AFA model is something we would much prefer to do without. It was originally intended to identify those firms still offering full advice but not operating under DPS. It will only complicate the advisory landscape and the preference would be to do without it.
” The AFA was intended to be a description of a firm which operates precisely as a as IFAs do today. AFA is basically IFA without the DPS. IF we can create a payment system which the majority if not all IFAs can deal with there will be no need for AFA.
“We only needed it because there where fears that DPS would lead to a desertion from the IFA sector.”