Shadow Treasury Chief Secretary Howard Flight has criticised the FSA's menu proposals and blamed Aifa for failing to push for a less rigid system.
Flight believes the menu has been over-engineered and that Aifa has failed in its resolve to make the proposals as workable as possible for IFAs.
He broadly welcomes the idea of clearer commission disclosure but does not believe the menu proposals will make a significant difference to customer service.
He thinks clients will be unable to distinguish between independent and tied advice and says the proposals focus too much on products rather than advice.
Flight believes the increasingly complicated material that IFAs are expected to plough through with clients will give them even less opportunity to be innovative with the financial planning services they offer. He thinks rigid requirements from the FSA give IFAs less scope to offer more flexible, sophisticated services.
Flight says: “The menu was an Aifa suggestion and I think the FSA would have been very wise to take heed of any criticisms Aifa had. In principle, I support the ideas behind the plans but, as a consumer, all I am interested in is what I am paying and if the total I am paying for that service is reasonable.
“If the requirements are the same for tied and independent advisers, these proposals do seem to be muddying the waters in a crucially important territory. The danger would be that the clients do not understand the difference between the different types of adviser and will only see the various prices.”