The FSA's phase two polarisation discussions are understood to be looking at introducing three levels of advisers – IFAs, multi-tied advisers and distributors.
Industry sources close to the discussions say the FSA is looking at a model of maintaining truly independent advice through the IFA channel while multi-tied advisers will be linked to a limited number of providers.
High-street financial services companies, such as banks, would act as distributors of their own and other companies' products and would be responsible for their own compliance.
Scottish Life head of communications Alasdair Buchanan says: “The London Economics report was looking at the possibility of introducing a middle point. But the perspective from which you look at multi-ties depends on which end you start from. The problem is that there is no defining description of what a multi-tie is.”
Clerical Medical head of strategic marketing David Shelton says: “This is a reasonable model in terms of keeping regulations consistent with what happens now. Multi-tied advisers and IFAs could be regulated through existing processes and the likes of Halifax and Lloyds could be directly regulated and responsible for their own agents. But the FSA must make sure disclosure is crystal clear.”