By Kira Nickerson Multi-ties are to be in place before 6 April, allowing banks and building societie...
By Kira Nickerson
Multi-ties are to be in place before 6 April, allowing banks and building societies to sell stakeholder pensions from other providers.
The FSA has issued a consultation paper concerning changes to the polarisation regime by allowing tied agents to sell products from other providers. At the moment the authority is only recommending the changes be applied to the selling of Cat standard products such as Isas and stakeholder pensions. It intends to do a wider review concerning the selling of other products later this year.
The consultation paper follows the announcement by the FSA in November that it intended to alter the current polarisation regime. It proposes that provider firms with direct sales forces, whether or not these have their own Cat standard Isa or stakeholder pension, can arrange to sell those of as many other firms as they judge appropriate.
It has also recommended that advertisements classed by the FSA as category B and category C, which provide information but no advice, would need to be changed.
This relaxation is intended to especially aid fund supermarkets, allowing them to advertise the specific funds groups they feature on their sites.
At the moment supermarkets are restricted to generic advertisements only.
Aifa is concerned about this recommendation, noting it goes further than the other proposals limiting the changes to Cat standard products only.
It believes the relaxation of advertising rules would apply to non-Cat standard Isas and direct investments into collective investment schemes.
The FSA agrees this could apply to all products as they fall under the direct offer financial promotions in which no advice is being given, for example newspaper advertisements and internet sites.
Paul Smee, director general of Aifa, said: "We are seeking clarification from the FSA on what it means by this relaxation of these rules. The line between generic information and specific information is becoming grey."
Under the rule change websites could then advertise that they offer the ability to access, for example, the top 10 performing funds in a particular market. Smee said the association is also looking for greater clarification on this point.
Malcolm Murray, founder of MFM management consultants, said he did not believe the FSA's planned changes to polarisation would affect IFAs in the short term as the products involved are not likely to make up a big portion of IFA sales.
He added firms, other than banks and building societies, would want to use the multi-tie route and organisations with sales forces would opt to use what he termed "gap filling" or "white labelling." This means allowing a provider to put its own brand name on another group's product
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