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United front in fight to save polarisation

IFA leaders and the Consu mers&#39 Association have vowed to fight Treasury and FSA plans to axe polarisation every step of the way.

Aifa director general Paul Smee says he will continue to fight for the best deal for IFAs despite the current changes and throughout the forthcoming review.

The CA says if the Gov ern ment had really wanted to increase competition and protect consu mers, it would have encouraged joint ventures between IFAs, banks and building societies.

The CA also says that it is baffled by the regulator&#39s logic and fears that another tier of financial advice in addition to tied and independent will lead to consumer confusion and misbuying.

The resistance follows the Treasury&#39s announcement in last week&#39s pre-Budget report outlining proposals to replace polarisation with multi-ties. The first stage, due to be introduced in April next year, will permit tied agents to sell stakeholder and Cat-standard products from other providers.

The second stage, which is still subject to consultation, could follow up with a complete abolition of polarisation later next year.

Consumers&#39 Association senior policy adviser Mick McAteer says: “Polarisation was not perfect but there is no justification for this proposed overhaul. We are concerned that if polarisation is diluted or undermined it will lead to confusion which will lead to people being ripped off and missold.

“We are very much aga inst the FSA on this and cannot understand the rationale. We will be doing everything we can to make sure this is part of the consultation process. If they are really concerned about cho ice, the best way to address this is to encourage joint ventures with IFAs and maintain the existing rules.”

Maddison Monetary Management managing director Mark Howard says: “We are a hounded cause and it is about time that we fought back. For too long, too few have got away with too much in this industry. They change the rules when they feel like it, reg ardless of what it means for consumers.”

Annuity Bureau director Ronnie Lymburn says: “I have spent a considerable part of my life building a business based on truly independent financial adv ice. The case needs to be fought by IFAs writing to their local MP.”

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