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Tied hands

Having read Simon Chamberlain’s essay arguing for the inclusion of multi-tied agents in Aifa, the same old question looms large.

Why would any true independent financial adviser give up his or her ability to provide impartial advice on all the products of all the companies that make up the marketplace?

The answer is higher commission. A multi-tied adviser is first and foremost a salesman, not an adviser, because whole-of-market independence is the only status that facilitates true marketwide advice.

As I have asked before, what happens when a client in need of pension advice, for example, asks the multi-tied adviser to provide analysis and recommendations on his existing pension with a provider not on that multi-tied agent’s roster? A good IFA is able to provide answers to all his questions. The multi-tied adviser cannot do this.

Faced with such questions, the multi-tied adviser is supposed to own up and confess that he is not authorised to offer any advice whatsoever on any products other than those of his firm’s four or five host providers. In theory, he is supposed to refer the client to a whole-of-market IFA. But how likely is this to happen?

In practice, the majority of multi-tied advisers will fudge these questions and look for a way of discrediting the client’s existing plan. How can it be any different? How can Simon Chamberlain or anyone else, come to that, expect us to believe otherwise?

Julian Stevens WDS IFAs,

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