IFAs must be sick of being made the scapegoats. The latest accuser is Gartmore chairman Paul Myners in his role as Treasury adviser.
His review has been told by persons unknown that IFAs may be skewing advice towards high-commission products such as with-profits funds, irrespective of performance. The report prints these unattributed accusations and, straying beyond its remit, recommends a follow-up report on the retail investment market.
Myners and, for that matter the Chancellor who accepted his findings, neatly ignore the London Economics report, used to justify axing polarisation, but which gave intermediaries a clean bill of health over commission bias.
But Money Marketing does accept the existence of a commission hazard. Most advisers believe commission is too high on certain products but also that the Government has dictated commission on others which is unsustainably low.
Myners version 2 may simply rehash the age-old conspiracy theory that commission and polarisation allowed life offices to sew up the market.
Fund managers may be forced to reconsider this theory the if small to medium players among them, are squeezed out by new multi-tied arrangements. It is also verylikely they will soon face unfavourable comparisons with unit-linked life funds meeting the 1 per cent cap, particularly those “manufactured” by other fund managers. Fund managers may rue the day when one of their own started this particular bandwagon rolling.