Positive Solutions has made a scathing attack on multi-ties, saying they are being used to rescue failing business models and will line the pockets of companies' directors, not their advisers.
Chief executive David Harrison has warned advisers that they will rue moving to multi-tied status because they will not be able to offer clients the best deals.
Any increases in commission will be short-lived, with most of the money going to the directors of multi-tying networks and nationals. He described advisers at some rival companies as “lions led by donkeys”.
Harrison made the withering remarks at the Positive Solutions' national conference at the Celtic Manor hotel near Newport last week.
The warning comes as Positive Solutions unveiled an incentive scheme offering new and existing IFAs a share of a possible £28m funded by part-owner Aegon. The firm hopes to have as many as 3,000 advisers by 2006.
Speaking to Money Marketing, Harrison said he believes that Positive Solutions “will be one of the few that will be truly independent”.
He said that products sold by independents will be chea-per than multi-tied products and that Positive Solutions will consider TV advertising to “aggressively and honestly name names and show how the market is for independent rather than restricted choice”.
He warned that multi-tied advisers will find themselves selling products which they would never have sold if they remained independent and that they will find themselves going back to being IFAs again.
Multi-ties would simply serve to stop providers having to compete against each other.
He said: “The people who take the money from a multi-tie will be the people at the top. You may get a little extra commission at the start but to do a great job for your clients you must be independent. You cannot do that with a rigged panel.”
Harrison also ruled out looking at setting up a mortgage operation following some service providers and networks, saying it was forced upon companies because they recognised the reality of non-regulated business being done behind their backs. He added that the move would damage their brands.