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Some of the lines are missing in CP121&#39s star role

As a father of two children, I recently went to see Harry Potter and the Philosopher&#39s Stone and was reliably informed by my nine-year-old daughter that they left out the best bits of the tale.

Although I missed seeing Lord Of The Rings, my son informed me that it, too, was not entirely loyal to the book.

The same could be said about CP121 (“the film”) where it fails to capture much of the research (“the story”) when reaching its conclusions.

Having spent the Friday night before last (who said life was dull?), reading the FSA publications, some 290 pages in all, it became clear that the block vote did not apply and an organisation with 1,000 members is treated as a single submission.

As only 37 IFA firms out of 4,000 – less than 1 per cent – responded to the initial consultation, this left us in the minority of responses and we need to bear this in mind when responding to CP121.

It could be argued that this is not statistically sound but now that we know it is the way the game is played, we should remember that the first rule of politics is to use the rules to your advantage, not to ignore them.

As a pragmatic optimist, I believe we can alter some of the proposals if we concentrate on matters from the consumers&#39 perspective and avoid trying to obtain a reversal of independent equals fee-based.

The commission-based IFA has lost their place in the marketplace because the differentials in commission for investment business are too significant to be ignored.

I believe that those seeing multi-ties as an opportunity to maintain current commission levels will be sorely disappointed when Sandler presents his proposals.

In addition, the much-vaunted phrase that “we can access the entire market” has been firmly rejected as unlikely by the public questioned for this report.

Recent research from IFA Promotion has underlined the fact that few IFAs made it clear to the public that they were independent and what that meant to the consumer.

We must ensure that this new buyer&#39s guide is not so verbose that is misses the point or, worst still, is never actually read.

We also need to ensure that our message gets over not just once but is reinforced at every available opportunity.

It was also clear that the public viewed bias on a provider-to-provider basis and not on a plan-to-plan basis as they assumed that the tied agent would not sell an unsuitable product to them.

Rather than criticise this we must try and explain that unsuitability is a greater danger than commission bias.

To do this effectively we need to voluntarily move to a single level of commission for all lump-sum investment products.

Can I suggest that this needs to be a reduction in the commission paid on with-profit bonds and not an increase of that paid on Isas.

The other key point for the more considered res-ponse to CP121 is the servicing of plans or policies for companies who are not party to the multi-tie.

Allowing companies to tie to the whole market may seemingly solve this issue if it did not go so heavily against commercial reality.

Limited multi-ties will militate against Sandler&#39s wish to see us being more proactive in giving investment advice if, as the FSA has said, you can only adv-ise on plans through companies to whom you are currently tied.

Perhaps by responding to Sandler en masse, we can ensure that the multi-ties are not seen as the successor to IFAs but as the lowerquality option.

Robert Reid is principal of Syndaxi Financial Planning

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