An overwhelming majority of IFAs have backed the current rules on polarisation in a poll conducted by Money Marketing this week.
One hundred IFAs were asked for their position on full polarisation and 87 gave their full backing over other options put forward by London Economics. The results are a massive endorsement of the status quo.
IFAs spoke about the clarity which polarisation offers to customers. After years of confusion in the sector, IFAs find polarisation gives consumers understanding and stability across an already confusing industry.
IFAs were asked whether they favoured full polarisation or gap-filling, commonly known as white labelling, where product providers fill the gaps in their product range with the product of another provider or multi-ties.
Gap-filling and multi-ties got just three votes between them while 10 IFAs were undecided on what would be the best scenario. Major networks and national IFAs, including Misys, DBS, Interalliance and Towry Law, all gave their backing to full polarisation.
Bankhall head of operations Tony Murrell says: “So far, nothing we have seen leads us to believe there would be any good reason to dilute the status quo. In fact, we would want to strengthen the status quo.”
Hargreaves Lansdown head of research Mark Dampier says: “Clients are just starting to understand what independent advice is. It definitely should not be changed.”
A Berry Birch & Noble spokesman says: “Multi-ties create confusion for customersas tied advisers take on a pseudo-independent role. Also, managingthe tension between selling their own products and the others on their list could be problematic.”
10 QUESTIONS THAT DEMAND ANSWERS
1: What benefits can multi-ties, product ties, white labelling or depolar-
ising stakeholder products bring to consumers which the current system fails to deliver?
2: How much will any change cost to implement, who will pay for this change and by what method?
3: What possible changes to stakeholder and Isas could be made to increase the efficiency of distribution without requiring changes to the polarisation regime?
4: What evidence is there to demonstrate a new regime will increase savings levels, especially for pensions?
5: What plans are there for a full public debate before any changes are made?
6: What research has been done to gauge public understanding of the current regime and how quickly they will understand the new set-up?
7: Will a change in the regime risk increasing the incidence of misselling and misbuying and, if so, by how much?
8: Who is ultimately responsible for the decision at the FSA and the Treasury?
9: Is this decision being taken purely on competition or economic grounds, as the London Economics' report suggests, or is the consumer interest to be taken into account?
10: What damage will the options for change, that is, multi-ties, multi-product ties, gap-filling or white labelling, and depolarising Catmarked or kitemarked products do to the IFA sector over the next five to 10 years?