The Government will risk throwing the baby out with the bath water if it follows recommendations to crack down on IFA remuneration through commission to prevent misselling, warns Liberal Democrat MP Normal Lamb.
Treasury select committee member Lamb urged colleagues to consider whether calls for tighter restrictions on commission for advisers recommended by Ron Sandler and the committee could destroy IFA networks.
Witness Paul Myners, author of the Treasury-commissioned review into institutional investment, denied that tough action over commission would mean the IFA sector disappearing.
Lamb said: “We are in danger of throwing the baby out with the bath water. In the future, not all these products will be sold by all advisers. Is there not a concern that these measures could destroy the network of IFAs?”