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Good cause for optimism

IFAs could have a clear-cut choice between remaining independent and multi-tying, according to the latest FSA utterances.

The regulator is minded to get rid of the “authorised adviser” category which had been expected to include those commission-charging IFAs seeking to advise on the whole market.

The crucial detail, which the FSA says allows it to do away with this category,is some unspecified amendments to or replacement of defined payment.

David Severn, who heads the review, wants a payment system that will encompass the majority of IFAs, if not all.

This could take the form of Aifa&#39s proposed menu, a system close to Ron Sandler&#39s recommendations or something in between. The possibilities are not exactly infinite.

There are at least two reason to be cautious. The first is that IFA groups remain split on whether Sandler&#39s system is a liberalisation of defined payment. Aifa believes it is, the LIA believes it is more stringent.

The second is that while David Severn has massive influence over policy, his ideas still need the backing of the FSA board and its attitude remains unclear so it is still not completely certain what will emerge.

There remains the distinct possibility that a restrictive payment system could be proposed without the authorised “safe haven”. But this is the worst-case scenario.

Despite one or two false dawns in the past year, Money Marketing believes that advisers who value independence should be more optimistic while insurers who have made it their strategy to scare IFAs into tying could see their plans unravel. IFAs may be genuinely free to chose their status post-depolarisation.

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