IFAs are demanding the ABI clarifies its position on polarisation following the revelation in Money Marketing that its last FSA submission advocated white labelling.
The ABI says the clause on white labelling was included after lobbying from its members. There was no such clause in the original draft submission sent out to life offices.
But providers with IFA sales channels are adamant they backed full polarisation despite ABI claims. White labelling, or gap filling, allows a provider to fill a gap in its range by taking another provider's products and selling them as its own.
Wentworth Rose managing director Philip Rose has written to the ABI saying: “In the light of these contradictory reports, we would ask to be given clarification of the association's position on polarisation and explain how this decision was reached.”
Rose grew concerned after reading of the clause's inclusion in Money Marketing last week. He also points out IFAs look to product providers to support “the advantages of fully independent advice”.
IFAs have also joined Money Marketing in calling for the whole polarisation debate to be held in the public arena.
Last week, Money Marketing launched its Poles Apart campaign and challenged the FSA and Treasury to answer 10 key questions.
Rose's letter says: “If the industry feels that it is necessary for this structure to be re-examined, we call on the ABI to hold this debate in the open so that all concerned can have their say. We hope it is your intention to include all affected parties in the discussion.”
Money Marketing's Poles Apart campaign last week issued 10 questions for the FSA and Treasury which we believe demand answers before the polarisation regime can be changed. This week, we publish the questions again along with a letter written to both Treasury economic secretary Melanie Johnson and FSA chairman Howard Davies outlining the reasons for the campaign. We accept that August may be a bad month to start a campaign but the FSA, for reasons known only to itself, decided to carry out its consultation during the summer. Silly season or not, we will continue to ask our 10 questions until IFAs and consumers get some answers
10 QUESTIONS THAT DEMAND ANSWERS
1: What benefits can multi-ties, product ties, white labelling or depol-arising stakeholder products bring to consumers which the current system fails to deliver?
2: How much will any change cost to implement, who will pay for this change and by what method?
3: What possible changes to stake-holder and Isas could be made to increase the efficiency of distribution without requiring changes to the polarisation regime?
4: What evidence is there to demonstrate a new regime will increase savings levels, especially for pensions?
5: What plans are there for a full public debate before any changes are made?
6: What research has been done to gauge public understanding of the current regime and how quickly they will understand the new set-up?
7: Will a change in the regime risk increasing the incidence of misselling and misbuying and, if so, by how much?
8: Who is ultimately responsible for the decision at the FSA and the Treasury?
9: Is this decision being taken purely on competition or economic grounds, as the London Economics' report suggests, or is the consumer interest to be taken into account?
10: What damage will the options for change, that is, multi-ties, multi-product ties, gap filling or white labelling and depolarising Catmarked or kitemarked products do to the IFA sector over the next five to 10 years?