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LIA wants degree but not fees

The LIA calls for a degree-standard professional adviser qualification in its response to the review and argues against a switch to fees.

It says the development of a degree should pay more attention to investment strategy.

Up-front commission may cause problems in product design, it admits, but says fees are “the ultimate form of front-end loading, unless they are paid in instalments.” It says fees would not reduce the incentive to oversell and a maximum commission agreement would run into difficulties with competition authorities.

The LIA does not believe the public wants to pay for advice for which the end result is not a solution or product. It says: “Replacement of mediation by free-standing “financial health-checks” might leave many consumers unsatisfied.”

The response questions if Government departments or regulators have the expertise to “second-guess” the market without distorting it, arguing product creation is a commercial role for market providers.

Towry Law product services director Charles Levitt-Scrivener says: “It is a nice idea to take AFPC to the next level up to degree standard, but it would be overkill for talking on the phone about an Isa.”

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