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Higher cash levels won’t cut misselling

Only one in five advisers think the introduction of increased capital adequacy levels will reduce misselling with the majority believing it will have no impact.

The survey found the strongest supporters of increased levels are the top-earning advisers and those with a heavy reliance on fee-based income.

Of those with a heavy reliance on fee-based income, 31 per cent think there will be a reduction in misselling as a result of increased capital adequacy levels compared with 19 per cent of advisers generally.

Advisers’ income is largely generated from commission, with only 15 per cent making more than half from fees.

There is a clear correlation between reliance on commission and levels of income. The lower the total income, the greater the percentage contribution is made by commission. For example, two-thirds of advisers earning less than £30,000 generate 95 per cent of income from commission.

Advisers feel Aifa is doing a better job in representing advisers in the RDR than the PFS and the Chartered Insurance Institute, with 35 per cent saying Aifa is doing an excellent job.

Only 24 per cent of those polled believe that the PFS/CII is doing an excellent job.

Twenty per cent of advisers do not think that Aifa is doing an excellent job and 37 per cent do not believe the PFS/CII is doing an excellent job.

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