After a jam-packed regulatory schedule in 2005, this year will largely see a consolidation of existing regimes.Personal Finance Society public affairs director John Ellis believes the effects of depolarisation will finally kick in as the honeymoon period enjoyed by advisers comes to an end. Ellis says falling commission levels will result in a move to fee-based advice for high-net-worth clients while multi-ties cater for the mass market. Institute of Financial Planning chief executive Nick Cann says the FSA will crack down on firms which nominally charge fees to retain an independent tag. The industry also has the level 2 rules of the Markets in Financial Instruments Directive to look forward to. Mifid is likely to bring more admin challenges as the FSA works the rules into its simplified Cob handbook in 2007. Ellis believes that RU64 will finally be scrappedin 2006 but this will not signal the death knell for stakeholder products as many have predicted. IFAs must wait to see whether their share of the Financial Services Compensation Scheme levy will be reduced as the results of the FSA’s review come in. Any changes are unlikely to come into force until 2007 so IFAs may face a hefty increase in 2006 due to a predicted threefold increase in endowment claims. Ellis believes the FSA’s review of mortgage and general insurance regulaton will start to uncover unseemly practices. In the second quarter, the FSA will also complete its review of the costs of regulation. Ellis says it is unlikely to make enjoyable reading and will not prevent consistent increases in regulatory fees in years to come.