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The Future of the Financial Advice Market: reforming polarisation and beyond (Special Edition)Product Type: Market Research ReportPublished by: Datamonitor Published: April 2002 Product Code: R313-3392 Description 'The Future of the Financial Advice Market: Reforming Polarisation and Beyond' highlights the negative response that many IFAs have to the proposed changes to polarisation by the FSA. Combining primary research interviews from Datamonitor's IFA research panel and leading industry executives, the report explores the future of financial advice in the UK and how the reform of polarisation will fundamentally reshape the distribution landscape. The report is split into three distinct chapters. The first chapter looks at the history of polarisation and how the FSA is seeking to reform distribution regulation through its positioning document CP121. The second chapter discusses the potential outcomes stemming from polarisation in conjunction with the research from its IFA panel of 100 independent financial advisers. This offers the reader an opportunity to gauge the opinion of key market players and understand the implications on their business. The third chapter looks specifically at the implication of the abolition of polarisation for the key players in the market, namely IFAs, non-IFA distributors, IFA-dominated product provider and non-IFA product providers. This report focuses specifically upon the life, pensions and retail investment markets. Product providers and distributors in these markets will be especially interested in the content of this report. In addition, retail banks, general insurers, wealth management services, premier and private banking services, e-Financial services and technology providers supporting the IFA channel will find this report useful in considering the wider distribution of financial services products in the UK.Table of Contents (Special Edition)INTRODUCTION What is this report about? Who is the target reader? EXECUTIVE SUMMARY Changing the polarised world The overall consequences if polarization is abolished Implications for the financial advice market CHANGING THE POLARISED WORLD Introduction The history of polarization Strengths and weaknesses of polarization FSA Consultation Paper 121 (CP121) Key proposals from CP121 Potential outcomes stemming from the FSA’s CP121 Option 1 (abolition) is the FSA’s preferred option Option 1 - abolition of polarization Option 2 - adopted products concept Option 3 - introduction of distributor firms or ‘multi-ties’ THE OVERALL CONSEQUENCES OF DEPOLARIZATION Introduction Remuneration Introduction of a defined payment system Life and pensions distribution with the introduction of a defined payment system Retail investment distribution with the introduction of a defined payment system The advent of fees Life and pensions distribution with the introduction of fees Retail investment distribution with the introduction of fees Implications for the future market structure The future of commission-based remuneration Life and pensions distribution under a commission-based structure Retail investment distribution under a commission-based structure Implications for future market structure Probable future for each advice channel Independent financial advisers (IFAs) Future market structure for IFAs Distributor firms or multi-tied advisers Future market structure for distributor firms/multi-ties Authorized financial advisers (AFAs) Future market structure for AFAs Tied advisers Future market structure for tied advisers IMPLICATIONS OF DEPOLARIZATION FOR THE KEY PLAYERS IN THE MARKET Introduction Implications for financial advisers Independent financial advisers Summary of the key points for IFAs Non-independent financial advisers Summary of the key points for non-independent financial advisers Implications for non-independent financial advisers with the abolition of polarization Product providers IFA product providers Summary of the key points for IFA product providers Implications for IFA product providers with the abolition of polarization Non-IFA product providers Summary of the key points for non-IFA product providers Implications for non-IFA product providers with the abolition of polarization APPENDIX Research methodology Composition of Datamonitor’s IFA research panel Questions asked to Datamonitor’s IFA research panel Responses not utilized in the body of this document Definitions Further reading Bibliography Wider readings Relevant links Contacts IFA Service writing team How to contact © Datamonitor 2002. All Rights Reserved. |
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