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Halifax turning tied

The revelation that Halifax is to scrap its IFA salesforce of 130 is a slap in the face for those who have championed the IFA cause and consumers&#39 right to choice.

It also goes against moves by other major financial institutions which are building up their IFA arms in a bid to provide more choice for clients.

Does Halifax think independent advice is dead? Is it a pre-emptive strike against the outcome of the polarisation review because it knows something no one else does? Or is it paving the way for future ventures into the IFA market under a different brand?

Senior press officer Ian Beggs says none of this is true. In its response to the consultation documents on polarisation, he says Halifax fully supported the status quo.

He says: “Our view on polarisation is that it should be retained. It is very important that people should be clear on the status of their adviser.”

But apparently this is not the case for Halifax clients. Beggs says: “There is not a clear role for independent financial advice under the Halifax brand. We find people who come to us expect to buy a Halifax product.”

Woolwich Independent Financial Advisory Services managing director Dawn Johnson says her experience is different. “Customer sophistication is growing all the time and if people are given a straight choice they usually choose independent advice,” she says.

In Woolwich&#39s takeover talks with Barclays, the strength of its IFA arm was something Barclays was very keen to pursue.

Johnson says: “They were really excited about it and want to get back into independ-ent advice. Having the Woolwich name to the IFA arm is a strength. It has always been a nice, safe thing for the customer to know and I do not think it has to be a separate brand.”

But Bristol & West deputy chief executive Ian Kennedy says it bought Chase because a B&W IFA arm would confuse its customers.

He says: “Bristol & West is associated with manufacturing mortgage and savings products and distributing them. It could cause some confusion in the customer&#39s mind trying to understand what we are all about. Do we search the market for the best product or do we manufacture them?”

Bradford & Bingley senior press officer James Evans thinks it is a strange move by Halifax when the market share of IFAs is growing and stands at nearly 60 per cent of all business written.

He says: “In our research, the customer is always say-ing they want face-to-face advice and they want indep-endent advice. Other people have been getting into it a whole lot more so it looks like they are bucking the trend.”

Johnson says: “It is a big chunk of the market but, if they choose not to be selling in it, that is their choice but it is a bit of a strange one.”

Aifa director general Paul Smee says it is always sad when someone stops offering independent advice. He says: “I would hope they find some way of providing independent advice for their clients.”

Despite assurances that Halifax values independent advice, Beggs says it is not something it has thought about providing access to in the future. He says: “First, it does not happen very often. I suppose if it did we would put clients in touch with an IFA in their area, probably through IFA Promotion.”

He points out that Halifax still has an interest in the IFA market through subsidiary Clerical Medical. It also has a 60 per cent share in J Rothschild Assurance but that is just another tied sales-force aimed at the top end of the market.

Smee thinks Halifax has plans it is keeping to itself. “At the moment, we may well be seeing only half the picture so it is difficult to comment. They might do something in a couple of weeks which makes the whole thing make sense,” he says.

But if there is no room for independent advice under the Halifax brand, what are its options? It could follow the route of Abbey National which has a joint venture with Willis Coroon, Willis National or Bristol & West.

Kennedy says: “I think the possibility is there but they have to decide to what degree they want to get involved.”

However, Kennedy says it would not be as easy for Halifax to buy an IFA as it was for Bristol & West. He says: “Relatively speaking, our sizes are not so disparate. There are a number of areas where there are synergies but in Halifax terms any IFA would be a relatively small business.”

There is also the question of what happens to its 130 qualified IFAs.

Beggs says: “They are highly skilled individuals and we would rather they did not leave the group.”

But Johnson thinks they are unlikely to be satisfied by anything Halifax can offer. She says: “I would be interested to see how may IFAs will want to move to being tied. It is a very unusual route to go from IFA to tied.”

Despite this, Beggs denied the company is in talks with any other organisations about moving the salesforce across as an independent whole.

Tenet group managing director Simon Hudson says talks may well be a good idea. “Halifax Independent Financial Advisers&#39 reputation in the industry is one of quality advice and we obviously feel with the different range of offerings we could give them they would fit very well into our organisation.”

If Halifax will not ensure its IFAs can remain independent, they may take the initiative themselves.


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