financial advice has become more important than ever before
for consumers to
help them navigate through financial
muddle. Today, a lot of people feel unsecured about their
investments as they lack trust and confidence in financial
the situation is about to get more complicated
with the introduction of ‘de-polarisation’.
The current regime for financial advice is 'polarised'. This means
there are two main types of adviser. Tied advisers can only recommend
the products of one provider. Independent advisers can, in theory,
recommend products from any provider.
However, the rules coming in during 2005 will
introduce a new breed of financial adviser known as a multi-tied
adviser. This dismantling of the current regime has been dubbed
Multi-tied advisers will be able to offer products from different
providers, but the decision about which providers these are won't
be based on who has the best products. Instead, it will be made
round the boardroom table between the directors of the big product
providers and the directors of the adviser firms.
A multi-tied adviser
won’t be choosing the best product
for you from the whole market, but offering the best one from
a limited range that someone else has selected. This range might
include two providers or ten. It might include the best products
available on the market or the worst, the cheapest or the most
But the financial services regulator has defended this new system
by saying this will give enough choice to consumers.