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Storm warning to stem the tied

There are rumblings of discontent from IFAs in the West Country.

At a Money Marketing IFA UK conference in Exeter, the first since CP121, rank and file advisers wanted the FSA opposed on principle as well as in detail.

Aifa and the networks, national franchises and even providers, which have been busy establishing some gentlemanly rules for the expected ungentlemanly scramble, should take note.

Aifa and its board members must be aware that if it accepts CP121 it risks the wrath of smaller firms. The bigger IFA businesses must know that many RIs will vote with their feet if they are coerced into behaving like tied advisers.

There is a moral hazard in accepting CP121 as a framework for anything. It is inconsistent and crudely interprets research to justify its conclusions, reading like a case for the prosecution, not a genuine attempt to study the market.

It will be difficult to overturn this plan against the Chancellor and the FSA chairman. IFA representatives may have to concentrate their fire on securing the best deal for the current intermediary sector.

But CP121 is wrong for a more fundamental reason. Most IFAs are sure the FSA has got it wrong for them but they are adamant it has got it wrong for consumers. IFA representatives, networks and individual IFAs should plan ahead for a post-polarisation world but it would be wrong to accept what the FSA has done.It may not mean storming the Treasury but IFAs should continue their opposition on principle and well as negotiating hard on the detail.

To do otherwise, would make IFAs complicit in the forthcoming shambles.

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