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Referrals will still be only to IFAs

Professional introducers such as accountants, solicitors and trade unions would still be obliged to refer business only to IFAs if Sandler&#39s vision of independence is accepted by the FSA.

Sandler says the review team considered relaxing the regulations, which state that introducers may only refer business to IFAs, but decided against it.

This means that IFAs who opt not to operate under Sandler&#39s remuneration proposals would not only lose the independent and adviser labels but could not conduct referral business, a significant revenue stream for many advisers.

But many IFAs say that under Sandler&#39s definition of independence, more advisers would opt to remain independent so the fact that only they could conduct referral business would not be a problem.

Sandler says that by limiting who introducers can refer business to, the independent proposition is made more attractive to advisers.

Syndaxi Financial Planning principle Robert Reid says: “If his definition of independence comes through, then I would imagine a lot more advisers would stay independent and the referral issue will not be a problem. The real question is how independence will be defined.”

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