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FSA&#39s consumer guide points to direct route

The FSA&#39s consumer guide to financial advice has stoked IFA fears that it

is steering consumers towards execution-only and direct distribution.

The guide, published this week, features a decision tree for consumers to

determine their need for advice. It asks if the individual is clear on

basic financial aims followed by two branches, which both steer to the

direct channel.

One branch asks: “Do you have some idea which companies you want to buy

savings and investments from?” while the alternative asks: “Do you already

know which companies you want to buy savings and investment products from?”

Independent financial advice appears only as one option on the third tier

of the tree alongside two direct routes.

The guide also urges consumers to haggle on fees and commission with

advisers, stating: ” Whether you pay by fee or commission, remember you can

negotiate over how much you have to pay for the advice.”

Holden Meehan IFA Dan Kemp says: “This clearly does favour direct sales or

multi-ties. Companies with big brand names are going to be the biggest

recipients and they may not be best for the consumer. Companies should be

one of the last things people look at. The FSA should be unbiased.”

Hightree Financial Services director David Walton says: “Previously, the

regulator might not have been so narrow as to get consumers to think about

product providers. I think we will be under enormous pressure to get into

execution-only or direct-offer business which we do not have the time for.”

Liverpool Victoria is to target IFAs, banks, building societies and future

multi-ties in a bid to widen its distribution channels.

Permanent managing director Andy Chapman is taking on a newly created role

at Liverpool Vic as group director of corporate distribution. He will set

up a new distribution channel which will tie with banks and building

societies and will look at any changes to polarisation.

Liverpool Vic bought Per-manent Insurance from Equ-itable Life for

£150m in January after losing out in the bidding for protection

specialist Scottish Provident last year to Abbey National.

Protection products and with-profits bonds are key to Liverpool Vic&#39s IFA

offering but it is not ruling out becoming a pension player. Liver-pool

Vic-owned IFA Frizzell will remain completely independent and not sell

Liverpool Vic products.

The friendly society is wid-ely regarded as the best-capitalised life

office in the UK and has been looking at acquisitions for some time. It is

understood to be very close to buying another life company, with Royal

National Pension Fund for Nurses a likely target.

Liverpool Vic spokeswoman Kate Coney says: “Sixty per cent of sales are

done through IFAs. If we do not make a good stand in the IFA market, we

will ultimately lose out. But it is only one means of distribution. We will

still have direct sales and we are keen to link up with banks and building

societies. It is not a secret we have been looking at acquisitions if it

will bring something beneficial to the group.”

Permanent Insurance is being rebranded Liverpool Victoria Life following

its takeover by the life office in January.

Protection products will continue to be sold under the Permanent banner

and administered from its offices in Exeter. The Permanent Insurance

company name will disappear from early June.

A management restructure will see Liverpool Vic group director Rye Mills

oversee the combined IFA sales operation.

The integration is des-igned to increase IFA sales of life and health

protection products by streamlining product design, the sales process and

client development.

Permanent will unveil details of its new flexible protection package,

which includes mortgage protection, at a series of nationwide IFA roadshows

in June.

Mills says: “We are delighted to be unveiling this product so soon after

the merger at a time when the protection market is attracting so much



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