The Association of Independent Financial Advisors (AIFA) fired a shot across the bow at the FSA...
The Association of Independent Financial Advisors (AIFA) fired a shot across the bow at the FSA yesterday.
AIFA cautioned the city regulator that if its intention "was to muddy the waters in the area of polarisation, then it will need to introduce more stringent rules on status disclosure in order to counter act consumer confusion".
The warning came as AIFA director general Paul Smee commented on consumer research carried out by both AIFA and the FSA, which he said consistently showed "the majority of consumers understand the difference between independent and tied advisers and consequently, where the advice they are receiving is coming from".
Smee concluded: "Fourteen years after its introduction, clarity remains polarisation's greatest asset."
The latest consumer research, commissioned by AIFA and IFA Promotion, was carried out by NOP World in September and October this year and involved 500 people between the ages of 18-70.
Almost nine out of ten questioned, who took personal financial decisions, understood "independent" meant "independent from companies which provide products and policies".
When asked which statement best fitted the description of an IFA, 57% chose the phrase which says "IFAs choose from all the products/policies available on the market" while 32% said "IFAs choose from a selection of the best products or companies".
When asked which statement best fitted the description of a tied agent, 65% identified that they chose from the products of just one company.
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