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The glare goes off polarisation

Could it be a case of as you were for IFAs? The FSA head of retail projects David Severn said as much at the Money Marketing Top 100 summit last week.

Analyses by many providers and IFAs suggested that in the next few years the market will, by and large, remain polarised, perhaps between IFAs and Sandler-selling direct operations with some shading into multi-ties.

As Severn indicated, IFAs are free from a regulator paying obsessive attention to how they are paid although it is still paying some attention – hence the menu. But it is very far from business as usual.

Plucking a few examples from the air, there is the near meltdown of with-profits, the bear market and its devastating effect on mutual funds, the pension reforms, Sandler, the emphasis from providers not on new business but on profitable business and the resulting shake-up of commission structures and the enormous pressure for consolidation facing everyone due to PI, falling margins and rising regulatory costs.

In the face of these challenges, Money Marketing believes that independence is still the best way forward and that most IFA businesses will continue to follow this course. Others, such as Berkeley Berry Birch deputy chief executive, Stephen Ingledew argued at the summit, that companies with a more limited range could deliver better prices and service.

We accept the case has merits but only if many of the best bits of the IFA advice culture can be preserved.

But perhaps this year there will be other issues requiring more attention. With so many challenges, IFAs are probably now accepting that there is more to worry about than polarisation.

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