Nick Bamford hits the nail right on the head when he writes that the multi-tie proposition is all about maximising commission and narrowing the scope of advice given by people who will have become little more than pseudo advisers.
As true IFAs, more and more of the advice that we provide is based on what prospective clients already have – is it good, is it bad, should they stick with it,should they add to it, should they look elsewhere?
Where I disagree with Nick is when he says that multi-tied agents will not be able to provide advice about a product from a company which is not one of its hosts.
Correction, Nick – multi-tied agents will not be legally authorised to give advice on such products but you can bet good money that if clinching a sale is dependent on the provision of some sort of apparently informed commentary on something the client already has, then said commentary will be offered.
I imagine that most of us have seen those TV programmes in which a tied adviser was covertly filmed telling clients to junk a perfectly sound product in favour of the new one that he wanted to sell them.
Multi-ties will take the industry back towards those very bad old days where the interests of the client were routinely sacrificed on the altar of the interests of the salesman.
Quite possibly, in similar circumstances, a true IFA would offer to take on the agency for a good product already in place and recommend that the client’s best interests will be served by topping it up.
The multi-tied agent will never do that in respect of any product with an off-panel provider, for the simple reason that it would be giving away a sale to another party, quite possibly an IFA.
The scope for misrepresentation of true status posed by multi-ties is the biggest danger to consumer interests.
This, to my mind, is so obvious that those who argue otherwise can only have a hidden political agenda but then regulation has been so politically polluted since time immemorial that this can hardly come as much of a surprise to those of us who are IFAs now and who plan to remain so.