I was interested to read in the leader of the October 31 issue of Money Marketing: “Aifa is the menu master”, that it is perceived that “the LIA is still warning of a great deal of upheaval among intermediaries”.
I would just like to put on record that the LIA is totally supportive of the concept of the menu.
Indeed, we have put forward our own ideas on this on a number of occasions – following the publication of CP121 and during the Sandler investigation. As you quite rightly indicate, Aifa and IFA Promotion, through the working party they set up, have come up with an interesting proposal which appears to have been instrumental in causing the FSA (in their words) to decide “that the objectives could be better met instead (of the DPS) by developing a so-called menu approach”. This is good news for all of us.
We still are concerned about some of the comments in the Sandier report and await with interest the FSA's consultation to see whether the Sandier approach has, in fact, now been abandoned in favour of the menu.
Bearing in mind that this exercise started out with a device (the DPS) to differentiate IFAs from other advisers, it seems curious that we are now talking about extending the replacement for the DPS to the tied sector.
If we do this, we are back into the somewhat theological debate about commission equivalents, which underlies the commission disclosure in the key features where the sale is made by a tied adviser.
We will need to be very clear about the gains for the consumer in following this route; The exercise should not just be a further layer of bureaucracy;
I personally do not see this debate as deciding whether the LIA or Aifa is right. The real issue is producing the right answer for consumers and therefore advisers;
John Ellis Head of LIA public affairs,