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Sceptical IFAs take CAR for test drive

Only one-third of advisers think that customer-agreed remuneration would remove product bias and improve persistency.

Out of 100 advisers questioned in Aegon’s IFA Insights survey, nearly half say a move to CAR would have a negative financial impact on their business although 46 per cent of disagree with this statement.

Nearly two-thirds of adv-isers were in favour of all types of adviser being required to operate CAR.

However, the majority think that CAR would not be appropriate for all groups of consumers, with 85 per cent saying it would be difficult to agree an appropriate level of remuneration.

Only 42 per cent think that if consumers understood the cost of advice, they would be more likely to seek it, but 56 per cent disagree with this.

Fifty-three per cent of advisers think CAR should not be applied to all types of product while 45 per cent say it would be useful across all products.

Head of corporate affairs Francis McGee says: “The CAR proposals are fairly green and will clearly be the subject of further debate during the feedback period. The research shows a degree of scepticism among IFAs but it is encouraging to see them quickly moving past their initial concerns and start thinking about where, how and for whom CAR could work and where it might not.

“There are many practical details to sort out in terms of how CAR should operate, but we should remember that it need not mean a sudden change in the way advisers are paid. Many providers have been offering CAR options on certain products for some time to give advisers flexibility in choosing a payment method to suit their client needs and business model.”

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