The FSA says some advisers could be hit because of downward pressure on commission and that “any advisers that do exit are likely to be relatively inefficient”.
Some IFAs say it is unjust to describe businesses beset by spiralling compensation costs, increasing PI cover and mounting regulation as inefficient.
FSA director of retail policy Dan Waters says: “Depolarisation is bringing us a more competitive marketplace. Good firms will succeed in this marketplace and those who are weaker will not. There is bound to be some fallout.”
LIA head of public affairs John Ellis says: “You can delete inefficient – this is the regulator exerting pressure on practising IFAs and we could well see further reductions in IFA numbers.”
Park Row head of business development Jo Smith says: “IFAs and brokers are being squeezed with technology, commission rate changes and pressure to move to fee-based advice. Doing a good job should be determined by whether or not they are providing a good service to their clients.”