View more on these topics

Providers&#39 collective to bridge IFA funding gap

A collective investment company funded by providers could bridge the IFA funding gap without compromising adviser independence, according to Aifa.

Both Aifa and Sofa have held discussions with providers looking at how to provide capital to the IFA sector while avoiding being seen to influence advisers.

Removal of the better than best rule would allow single providers to buy IFAs outright but Aifa is concerned that this could lead to consumers perceiving bias.

Life offices are reportedly looking at a model whereby a company would be created with IFAs and providers as shareholders to act as an investment house for IFA businesses but at arm&#39s length from providers.

The collective investment vehicle could be set up to provide funding, either through equity stakes or soft loans, to IFA firms with business plans that met fixed criteria set up along the lines of those used by venture capital firms.

Providers see the plan as a way to fund the change from up-front commission to level commission.

Aifa director general Paul Smee says: “Providers collectively investing in IFAs might be a way of squaring the circle to get round consumers&#39 concerns of selling the products where a firm is owned by one provider.”

Sofa chairman John Porteous says: “The funding gap is one of the biggest problems facing IFAs so we need to look at all the options. But a collective pooled investment vehicle would only be a starter if you got enough providers on board.”

Recommended

Something to Crowe about

The Diary hears that at the recent NAPF conference, Norwich Union director of pensions development Jerry Barnfield tried to convince an audience of unwitting pension professionals that he was the spitting image of Hollywood heartthrob Russell Crowe.Nice try, Jerry, but thumbing through the latest issue of a glossy celebrity magazine (it&#39s not all work, work, […]

International financial bodies slam internalisation proposals

The Association of Private Client Investment Managers and Stockbrokers has rejected proposals by Euronext suggesting that all securities be routed to exchanges for execution.In a position paper to the European Commission, the APCIMS says that imposing the proposals would protect neither the integrity of the markets nor the interests of investors.It says a “one size […]

What they said in G80 workshops

“The IFA of the future will be a fully time-controlled, cost-driven, professional practice. The bigger distributors will have both and AFA and a smaller (initially) IFA part.“The AFA will look like second-class citizen.”“Advice firms have to emphasise ongoing relationships and move away from transactions. They will need IT to support this, service and marketing-orientated.”“Use of […]

Chinese impressed with Isle of Man

The Isle of Man is moving towards establishing financial services links with China following a visit by Chinese officials to the island.Representatives of China&#39s Central Bank discussed with the Isle of Man Financial Supervision Commission the possibility of setting up operations on the Isle of Man.They explored the potential for training Chinese bank staff at […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    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 advice.

    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

    Email: customerservices@moneymarketing.com