It was of no surprise to read that 81 per cent of IFAs will not consider multi-tying after depolarisation, preferring to keep their independence (Money Marketing, May 20).
Nonetheless, I would encourage IFAs to think more broadly about the possibilities that depolarisation brings,as it will undoubtedly benefit the vast majority without any significant changes to their current businesses or the breadth and depth of advice that they are able to provide their customers.
The FSA has clearly not thought through all the nuances of multi-tie which could well delay implemen-tation further but if the current timetable is adhered to, then by the end of this year, we are going to see the emergence of a number of multi-tie organisations that are able to offer a very attractive package of “goodies” such as enhanced commission, improved (and possibly subsidised) technology and associated e-enabled processes.
But the real differentiators are likely to come in the form of improved product terms, attractive PI schemes, reduced compliance costs and the ability to leverage the capabilities of the major providers, such as low-cost offshore processing, procurement savings, training etc.
Most IFAs would claim that the downside is that these benefits are only likely to be offered within a fairly narrow multi-tie of, say, four or product providers.
However, the vast majority of IFAs are already working from fairly narrow panels,so, provided that the product providers are (and remain) market leaders, then they should notice little difference in the day-to-day provision of advice and may well have even better products to offer.
The reality is that the IFA market cannot continue as it is for much longer. The downward pressure on margins is unrelenting and will only be exacerbated if the Sandler suite of products is introduced as proposed.
Although the IFA channel has suffered less than others, the market now needs to find an alternative, sustainable model.
Depolarisation brings with it the possibility that multi-tie could deliver this new model, but only if IFAs are prepared to collaborate with the product providers.