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Misys likely to take distributor status

Misys IFA Services has accepted most of its members will probably be

unable to remain independent in a depolarised regime because a move

to fees would cripple their businesses and deny clients&#39 choice.

The giant network looks set to opt for distributor status for most of

its members while researching the whole market.

The move comes as the FSA appears to be promoting the option of IFAs

dropping the independent tag but continuing to operate on a

commission basis, allowing them to remain independent in all but name.

In an article in Money Marketing this week, Misys marketing director

Andrew Bedford says IFAs may want to remain independents but only a

few member firms will be able to do so. He says Misys believes most

members will maintain membership of a distributor firm researching

the whole market.

Speaking at the Retail Fin-ancial Services After Sandler conference

in London last week, FSA head of conduct of business David Severn

spoke favourably about the AFA option, which until now has been

largely overlooked.

The FSA does not have the authority to ban commission but it can say

that, to remain an IFA, an adviser must operate in a defined-payment

system, which establishes an up-front charge and then offsets fees or

commission against it.

Despite only being briefly mentioned in CP121, Severn, who is head of

the FSA&#39s pol-arisation review, spoke at length about the AFA option

both at the conference and in a BBC radio interview a few days

earlier.

A conference delegate says: “Severn emphasised the AFA option. He was

explicit about it, in exactly the same way as he did on radio.”

Aifa director general Paul Smee says: “Severn is realising that

people still need to ply their trade, that he can&#39t make it

impossible for them.”

Bedford, p16

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