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Row breaks after warning on ‘inefficient’ firms

IFAs have reacted angrily to FSA predictions that depolarisation will force some advisers to leave the market.

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.”


Bond ambition

How do offshore bonds differ from onshore bonds? How do they compare in cost?Steel: Onshore bonds are taxed within the funds as they go at 20 per cent, which is the equivalent of the savings rate. For a basic-rate taxpayer there will be no more tax to pay on a chargeable event. A higher-rate taxpayer […]

Security measure

MARLBOROUGH FUND MANAGERSHigh Yield Fixed Interest FundType: Unit trustAim: Income and growth by investing globally in fixed-interest, variable-rate and index-linked securitiesMinimum investment: Lump sum £1,000Investment split: 100% in fixedinterest, variable-rate and indexlinked securitiesIsa link: YesPep transfers: YesCharges: Initial 5.25%, annual 1.5%Commission: Initial 3%, renewal 0.5%Tel: 0870 757 7205The objective of the Marlborough high-yield fixed-interest fund […]

Provider investment in advisers only on commercial basis – FSA

The FSA has clarified that product provider investment in an advisory firm must be on commercial terms.The regulator says that if a provider invests in an advisory firm, whether by loans, investment or otherwise, it must be on commercial terms which are objectively comparable to those on which an independent person unconnected to a provider […]

FSA to educate consumers about menu

The FSA has confirmed that it will support implementation of the menu with a consumer education programme.The regulator says that the campaign will emphasise that the cost of advice does not necessarily convey best value.


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