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PIA in call to keep polarisation

The PIA board has soundly endorsed polarisation, condemned multi-ties and called for maintenance of the status quo in its response to the FSA consultation.

The board says a robust IFA channel is necessary and changing it could cause substantive damage to consumer understanding of the marketplace.

The response is one of the strongest messages in favour of polarisation the FSA has so far received. It is especially significant because the PIA is part of the regulator rather than an outside interest.

The PIA&#39s report says no changes to the present regime need to be made and that multi-ties would constrain the marketplace. It says blurring the choice of channels of advice will not tempt consumers to shop around but will only add to their confusion. Nor will it increase competition in the market.

The report says: “Consumer benefit in the retail financial services market is well served by the continuity of business carried on by a robust independent financial advice and distribution channel. Consumer understanding of the marketplace through polarisation is an important public good, which could be damaged by substantive change.”

Sofa chairman Peter Williams says: “It is delightful to find the regulator supporting the current position which has served the customer very well. The Government should heed what they are saying that it is important to continue supporting IFAs.”

Aifa director general Paul Smee says: “The case against change to the current polarisation regime is building.”

An FSA spokeswoman says: “The PIA board are quite entitled to have their view. They are one view along with many others and we will take it into account when we make our recommendation to the Treasury.”l Comment, p33


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