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Following the FSA report on Reforming Polarisation: 'A menu for being open with consumers (CP121 and CP166)', the process of selling investment products to private clients is about to experience a major change. Banks, building societies and IFAs will have to decide whether to be commission-earning representatives of a panel of investment companies, called a multi tied agent, or to be a tied agent representing just one product provider, or to be independent financial advisers charging on a fee basis only.
In the past third parties could only be a tied agent, tied to one product
supplier, or an IFA. The concept of multi tied agent was not permitted. It is thought many major financial institutions are now likely to become multi tied agents. This raises two implications, firstly how to consistently offer fair investment advice and secondly how to deal with multiple product providers electronically.
Speaking on the launch of WMS Fairs Multi-tied agent product Paul Foll, Sales Director of WMS said:
'The first point is that, when approached by a new private client, all types of financial adviser will have to provide an initial disclosure document (IDD), defining what kind of investment advice is being given. All advisers will need a computer system to provide and hold details of such a document'.
The second significant point is that whereas the current form of sales agent, known as a tied agents can use a the computer system of a product provider to view details of client and their investments, the new multi tied agents will need an in house computer system, because of the need to consolidate information from more than one product provider, and to do so electronically.
'In order to operate as an efficient multi-tied agent you need sit down with a client, prepare an IDD, reach an investment decision through an informed process, invest the money electronically with no manual intervention and be able to provide up to the minute consolidated valuations and commission reports on demand. Fairs for multi tied agents manages this whole process and incorporates links to fund supermarkets for those parties that wish to deal through a fund supermarket rather than direct with the product provider. However a fund supermarket is not a panacea, most only deal with OEICs do not cover life products and do not offer the full spectrum of products'
Wealth Management Software is a publicly quoted UK software company, with a number of offices in the UK and Europe. Software installations are global.
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