Research from the COVER Forum reveals advisers' fears for independence
Only 29.8% of IFAs believe they will continue to be independent after the implementation of depolarisation.
A poll of IFA opinions, carried out by GE Frankona Re at the recent Manchester COVER Forum, found over 29% of IFAs feel they will be forced into becoming multi-tied, another third may become authorised financial advisers.
Paul Casey, media relations specialist at reinsurer GE Frankona Re, was concerned about the results.
He said: 'If advisers are not truly independent, then they cannot offer the best products in the market as some market leaders would be outside a tied remit, which is a worry.'
Casey was also worried about increased levels of fee-charging. He added: 'Another industry concern is whether advisers could make enough money on a fee basis. Would a consumer be as driven to seek truly independent advice if they had to pay cash up front?'
At present, almost one-third of respondents are commission- only based and 28% a fifty-fifty fee/commission split, with the remainder evenly spread among the rest of the possible proportional range. However, only 14% thought it possible to remain solely commission based. Over half, 54%, felt they would take less than a quarter of their income through commission.
Charles Ansdell, corporate relations manager at IFA Inter Alliance, said: 'So much has to be decided yet I do not see how people are making judgement calls on what the Financial Services Authority (FSA) is going to do. I think a lot of IFAs have jumped the gun, this is only at the consultation stage. It has always been our intention to be as independent as possible but how it works out depends pretty much on how the Government decides to move.'
He added: 'I think the FSA's initial suggestions made it clear if you wanted to remain independent you had to operate under a defined payment system, however, there have been indications from the FSA of a slight softening in that line. Equally, the Sandler proposals suggest you can have an advisory relationship with a client on a fee or commission basis as long as the client has clarity and understands what they are paying for.'
Almost 60% of those polled either agree or strongly agree with the Association of British Insurers moratorium on genetic results, which lasts until 2006, with a review in 2004.
Similarly, 63% agree insurers should continue to be prevented from requesting sight of any genetic test results, the same percentage think insurers should never be allowed to request these tests. However, over three-quarters were in favour of proposal forms carrying detailed family history questions.
Casey said: 'Where the insurance industry disagrees is with the right to see results of genetic test results. If someone has had a test and the test is positive, then insurers should have access to the results. A positive diabetes test for instance is admissible, but for some reason a genetic test is considered different.'
