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LIA says advisers would do better under DPS

IFAs would do better under the FSA&#39s defined-payment system than under Ron Sandler&#39s proposals for the remuneration of advisers, claims the LIA.

Under Sandler&#39s plans, advisers would negotiate payment with clients, a process the LIA does not believe IFAs are prepared for.

Director of public affairs John Ellis says that under the DP system, IFAs can still operate on a commission basis, even if the amount of payment is determined by providers, a concept that Sandler opposes.

Ellis plans to take his message to the FSA and the Government and to conduct a survey of LIA members to see if his fears are confirmed.

Sandler says a form of commission could still exist as the fee could be paid over time as a percentage of the initial payment or of the funds under management, much as commission operates today.

Ellis says: “The reason why this system is worse than the DP system is because you have taken commission away.

“It will be up to the IFA to negotiate a fee and advisers are not prepared for these changes.”

Baronworth Investment Services director Colin Jack-son says: “This is not quite right. Most independent advi-sers are well able to negotiate most things because that is their business. It is whether the clients will be willing to pay for advice.”

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