View more on these topics

Polar expedition reaches another milestone

The industry is waiting anxiously for the latest pronouncement on

polarisation. Due later this month, it could have major ramifications for

the fate of independent advice.

The findings of a study by consultants London Economics are expected to be

published at the end of the month. The FSA commissioned the study to inform

its decision on whether to change the existing polarisation regime.

The study is seen as so significant that IFA Promotion&#39s board has decided

to delay the appointment of a replacement for Ann-Marie Martyn until after

it is published. This will help it decide the qualifications the person

will need, whether lobbying or marketing skills.

The contents of the study are still under wraps but the industry is

bracing itself for change. It is commonly accepted that the Treasury would

like to do away with polarisation.

Polarisation was introduced in 1988 to give absolute clarity on the

difference between independent and tied advice. But industry sources say

the Treasury has long held the view that polarisation is anti-competitive

with, for example, high-street banks only being able to offer own-brand


The issue came to the fore again last year with the publication of the

Office of Fair Trading&#39s report into polarisation. The looming problem of

how to sell products in the low-charging stakeholder era has added to the


Polarisation could be tweaked to incorporate white labelling or completely

replaced with multi-ties. White labelling is the practice where one

provider takes the products of another to sell under its own brand.

Sofa spokesman Robert Reid believes white labelling is on the way. He says

its introduction will start a trend towards IFAs selling the concept of

advice rather than being product salespeople.

Reid would welcome such a shift. He says: “If you take products out of the

equation, then advice will not be biased. There will be a move towards

advice, anyway, irrespective of white labelling, with the advent of fund


“Anyone who thinks the market will stay the same is naïve. IFAs have

to stop swimming against the tide.”

LIA public affairs director John Ellis does not think any small tweaks to

the rules will have a great deal of influence on the marketplace. But he

fears the independent sector will be eroded if the current regime is

completely overhauled.

He explains: “People will be offered silly money for going into tied

relationships and competition between firms will see them giving out

premiums for loyalty as well.”

The effect will be compounded by the fact that a multi-tied agent will

look like an IFA to the outside world.

As for the timescale of any change, Reid does not believe it will take

long to get new rules in place if white labelling is brought in.

He says: “All you are doing is encouraging something that already goes on.

They just have to work out who to blame when things go wrong.”

Ellis says: “If London Economics comes up with something that pleases the

Treasury, then the matter will be settled straight away. But it is likely

the Treasury may want to study it more fundamentally. Then the FSA will

have to do its consultation with the wider world.”

He also points out that the Competition Commission may be brought in for a

third opinion. This could lengthen the whole process as the commission is,

in Ellis&#39s words, an unknown quantity.

It only gets up and running when the Financial Services and Markets Act is

implemented later this year. Ellis says: “I cannot see it being resolved

before next year.”

Whatever happens to polarisation and whenever it happens, it is sure to

fuel a lot of debate. Sofa says that, once the study is out, it wants to

sit down with Aifa and IFA Promotion to work out its next move.


MD is head over heels as Wentworth Rose turnover leaps by 64%

Turnover at retirement specialist IFA Wentworth Rose rocketed by 64 percent last year.For the year ending April 30, turnover in terms of fees and commissionincreased to £3.93m from £2.39m the previous year.The company says the success of its annuity and drawdown service made asignificant contribution to the year-end figures.Launched last year, the service has added […]

Turn over a new relief

The eventual disappearance of mortgage interest relief, having been on thecards for so long, caused nothing like the uproar that might have beenexpected had it been removed at a stroke.Its removal had been discounted by the housebuying public for a longwhile. This acceptance can be traced back to the introduction oflimitations on the rate of […]

Chase de Vere in mortgage link-up with IFonline

Chase de Vere Mortgage Management is linking up with mortgage commontrading platform IFonline.The link means Chase will use IFonline&#39s system as one of its onlineresources for searching the mortgage market.Chase hopes that the move will help its brokers match clients&#39circumstances to the most suitable mortgage from a comprehensive range ofproducts.IFonline&#39s site is supported by a […]

&#39Compete with Charcol&#39 call to new e-brokers

IFAs are being offered the opportunity to create their own rival tocharcolonline with a white-labelled mortgage application website fromMortgage 2000.But the company&#39s tag line – “Become a charcolonline or E-loan” – isbeing challenged by John Charcol.Mortgage 2000 is offering IFAs a bespoke version of site, which allows searches across every mortgageproduct in the market, […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers. Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and thought leadership.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm