Edward Vaizey (Money Marketing, February 7) states that IFAs working on a commission basis are effectively already multi-tied and those paid fees are (unquestionably and logically) independent. This is nonsense.
Integrity and efficiency have absolutely nothing to do with the way one is paid. One only has to see the disparate results of surgeons to see that.
I used to work for a national firm of accountants which was firmly fees-only. The moment the client walked through the door the fee clock started ticking and we had to time everything to the nearest 12 minutes.
However, on the other side of the coin all commission that was received was kept – even if it was held against future fees.
No discounts whatsoever were contemplated or ever made. They therefore got the best of both worlds. After I left, the company employed an ex tied agent who did not even know what an annuity was.
The fact is that many IFAs paid on commission do a lot of “free” work such as, for example, doing valuations and helping wind up estates for solicitors (who are charging).
Why is it that the IFA helpline at the National Savings Centre is so often engaged? I cannot imagine it is because there is a queue of people trying to earn commission.
The chances are that National Savings certificates are being recommended by IFAs without even a fee being charged.
Finally, remember that a lot of products do not pay the full amount of commission, such as Norwich Union's corporate bond, some pay no commission at all, such as M&G's Charifund, which presumably must get recommended by some IFAs and, of course, the ubiquitous Equitable Life who now have the nerve to say that it may benefit IFAs in transferring away from that company.
Jamieson Financial Management, Bognor Regis