IFAs are focusing on too broad a sector of the market and as a result there is too much reliance on commission from continually selling products rather than on a holistic long term planning service, argues Abbey.
The firm warns while the debate over commission versus fees is just one of the pressures which could change the IFA market, the business model will have to operate on fees in the future, with those at the lower end of the market switching to high street banks and tied agents for advice. Abbey does, however, say that this won't happen overnight and "will be painful". Comments made by Callum McCarthy, chairman of the Financial Services Authority (FSA) last September - about the problems of the current business model used by advisers and in which he described the market as “failing consumers...
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