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MPs to probe FSA plans

IFAs have been thrown a lifeline as the Treasury select committee has confirmed that it plans to hold hearings in to the FSA&#39s polarisation proposals.

The Parliamentary committee, which is made up of MPs of all parties, says that it is very concerned about the regulator&#39s proposals and plans to conduct a hearing as soon as time permits.

The Government is under no obligation to listen to the committee&#39s proposals or concerns but a previous report on the pension review saw the FSA amend its approach.

The news comes as Conservative peer Lord Hunt of Wirral, who is chairman of Aifa, says he will try to force a debate in the House of Lords about polarisation. The all-party insurance and financial services committee chaired by Conservative MP John Greenway plans to hold its own meeting.

At a meeting of the Treasury select committee this week, MPs gave a rough ride to financial services consumer panel chairman Colin Brown, saying his group was becoming a middle-class academic exercise with not enough contact with real consumers.

Brown was criticised for not doing anything to tackle financial exclusion, to deal with money laundering and for failing to respond to the FSA&#39s polarisation proposals which were published nearly a month ago.

Committee member Labour MP Nigel Beard says: “The general mood was that he was being academic about a lot of these issues and out of touch with consumers. When we asked him about polarisation, he said the panel would only meet in the next few days, a month after the report was published.”

This week, Treasury economic secretary Ruth Kelly answered a written question about polarisation from Conservative Shadow Paymaster General Howard Flight in which she conceded that the defined-payment system would be likely to lead to the shrinkage of the IFA sector.

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