AIFA consults on admitting multi-ties

The Association of Independent Financial Advisers (AIFA) has moved to reassert its position ahead of a consultation into whether multi-tied and whole of market advisers should be admitted to the association.

The consultation comes in response to the changes to adviser classifications under depolarisation.

Under the new regime the definition of an IFA has changed and new intermediary models such as single-tied, multi-tied and whole of market advisers have been created.

This poses a problem for AIFA as some of its current members, who were IFAs before depolarisation, may now be classed as multitied agents.

There are fears that allowing such intermediaries, with direct links to selected providers, to remain in the association may compromise AIFA's integrity as the trade body for independent advisers.

"We are here for those people who put the interests of their clients first, not for those contractually obliged to sell any specific firms' contracts.

This is why I want our members to decide on this, because essentially, it is their association," said Chris Cummings, director general of AIFA.

The consultation will involve all 17,000 members of AIFA and has stirred up debate among the intermediary community as to whether multi-tied agents should be permitted to stay on in the association.

Cummings was quick to urge, however, that the size of the issue must not be blown out of proportion.

"We do not know of one IFA firm to date that has gone totally and wholly multi-tied," he said.

AIFA is hopeful that the consultation will give them a clearer picture of just where its members stand in the post-depolarisation market and how big an issue this may be.

Cummings also warned that membership fees may have to increase by up to 25%-30% if large networks with a multi-tied division are deemed no longer eligible for membership.

The results of the consultation will be announced at the AIFA council meeting on 15 September 2005.