The Association of British Insurers is urging the Financial Services Authority to keep financial advisory roles polarised – or risk confusing the public.

Polarisation is the system where advisory roles relating to investment products are segmented into independent intermediaries on the one hand, and tied agents on the other.

A statement from the ABI said: "We believe that effective competition, consumer protection and the promotion of savings should be the guiding lights here.

"Abandoning the clear distinction between independent financial advisers and advisers tied to one another would confuse customers and could damage their interests. It could also have unpredictable effects on the market."

The ABI's call comes in response to an FSA consultation on polarisation that asked for views on:

  • the redefinition of polarisation of all products allowing firms to choose to be independent, tied, or multi-tied with clear disclosure of status
  • the removal of collective investment schemes from the ambit of polarisation
  • minimum standards exemption where simple, packaged products such as CAT, ISAs and stakeholder pensions would be removed from the ambit of polarisation.

    "We favour maintaining the distinction and are keen to work with the regulator and the Government to assess possible improvements," the statement read.

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