IFAs will now have until June 1, 2005 to comply with the FSA’s new disclosure requirements which will see independent advisers forced to adopt the payment menu and to offer a fee-paying option to their clients.
Firms, including banks and building societies, are now free to move to a multi-tied model as soon as they satisfy the FSA’s requirements.
Many of the bigger players such as banks, product providers and networks have already revealed their intentions to offer a multi-tie proposition but it remains to be seen how many owner-managed and medium-sized IFAs will change their business model. The FSA says it expects most IFAs to stay independent.
Top IFA industry chiefs, including Thinc chief operating officer Simon Chamberlain, Millfield chief executive Paul Tebbutt and Tenet group managing director Simon Hudson, were summoned to a dinner with FSA chairman Callum McCarthy and chief executive John Tiner at Canary Wharf in London on Tuesday evening this week to gauge the industry reaction to the changes.
IFAs are already criticising the new regulations, saying that the FSA has set the market average for commission too low while concerns are growing that depolarisation will force advisers struggling to survive to leave the industry.
Aifa director general Paul Smee says: “The future is in the industry’s own hands and we now have to make use of the opportunities presented by depolarisation, and not just focus on the threats.”
Informed Choice managing director Nick Bamford says: “We are so used to change that after a while it becomes unnatural for there not to be change. We will live through depolarisation but it is a real pity that it has to be this way.”Depolarisation details, p2,3,8