Criticisms of the retail financial distribution model by the Financial Services Authority and the Financial Ombudsman Service, particularly over the use of commissions, have provoked a flurry of angry responses from IFAs.
Walter Merricks, chief ombudsman at the Financial Ombudsman Service (FOS), called the distribution model “fundamentally flawed” and said it was at odds with basic legal and agency principles. But many IFAs disagree with his comments and say they work exclusively for their clients, the majority of whom would not be willing to pay for fee-based advice. Colin Langton, chairman of Langtons (IFA) Ltd, says: “The courts have ruled that an IFA is an agent of both as he/she acts simultaneously for the provider and the client. After all we sign agency agreements with the provider and complet...
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