The Conservative Party has reversed its policy on polarisation, throwing its weight behind the creation of multi-tied advisers.
In a pre-election policy document entitled, Financial Services: The Conservative Approach, it says: “While we support reform of the polarisation regime, we will require a financial intermediary to make clear whether he is a tied agent, offering only single or multi 'tied products' or an IFA.”
The move is seen by IFAs as a U-turn in the Tories' previous position set out last September in Money Marketing, which appeared to favour the status quo.
At the time, Shadow Chancellor Michael Portillo said: “The independent sector plays a valuable role because they are not tied to any one product range. Financial advice cannot be coloured and must be transparent.”
But Portillo argues the latest statement does not amount to a policy change, saying: “You will still have polarisation, with tied or independent advice.”
Conservative sources have also suggested their policy change is in line with what IFAs want.
IFA Franklin Financial Service director Neil Franklin says: “Introducing a third category will bring the whole system down. If we bring in another strand, the consumer will be even more confused. This policy would mean IFAs would disappear.”
Hargreaves Lansdown director, IFA division, Michael Roach says: “I am aghast at the Tories coming out with this. From where I sit, there is no way we want this. Given the amount of change that IFAs have undergone to comply with the compliance rules and get in shape, we have done our part to meet that challenge. Changes to polarisation undermine that.”