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Repolarisation returns

The IFA market is repolarising back into two camps and the FSA should recognise this in its regulation, according to Informed Choice managing director Nick Bamford.

He says that since depolarisation the IFA market is dividing into independent financial sellers who work with products and commission on the one hand and independent financial advisers who offer advice and fee-based models.

Bamford wants the FSA to recognise there are two different types of adviser operating in the industry and reflect this in regulation. He says mystery-shopping exercises are concentrated on the suitability of products rather than on the quality of the advice given.

But Tenet chief executive Simon Hudson does not believe repolarisation is happening and certainly not to the extent that the FSA should deal with it. He says: “Even if it is happening, it would not solve the issue because it would just add another tier of confusion. Trying to differentiate between advisers by using commission as a vehicle would outlaw commission-based advisers as the bad guys, which would drive a massive wedge into the industry.”

Bamford says: “I would like to see proportionate regulation and some recognition on the part of the regulator that a number of IFAs have moved away from product-based sales towards an advice-based model.”

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