Polarisation - what effect would it have on the financial adviser recruitment industry?

Depolarisation - the rule that gave rise to the prominence of the Independent financial adviser or IFA has recently come under close scrutiny following the publishing of the Retail distribution review, the guidelines laid down by the FSA for the future of the financial services industry. For the layman, depolarisation legislation gave rise to the term 'independent' financial adviser by drawing a clear line between the differences in those who could offer truely independent advice and those who were working for companies offering their own financial products. Depolarisation also created a third type of financial adviser, the multi tied option. This basically means that the multi tied financial adviser, although not truly an IFA, can provide financial advice on a number of products from various providers, therefore offering a choice of sorts to those requiring financial planning advice.

Are we moving back towards a polarised financial services market and what differences will it make to the IFA and financial adviser of today and more importantly for those of us in the financial services recruitment market, the financial services industry ? Consumer protection was of course a huge motivating factor in the introduction of depolorisation legislation yet many recent studies have shown that consumers are not entirely concerned whether or not their financial adviser is truly independent or not and are more concerned that the products provided are the right financial products for them, with the right image and the right reputation. So, does this mean that consumers are apathetic towards financial planning?  I wouldn't have thought so but I would have expected the recent turmoil in the economic climate to have the effect of making consumers consider their choices more than they perhaps did previously although so far, studies have shown that isn't the case.

It is unsure as to what effect polarisation would have on the financial services recruitment industry and from the consumers perspective it seems to make little difference.  Multi tied advisers would simply have to become truely 'independent' financial advisers offering a choice from the entire market or 'tied' financial planners providing products from one provider, a salesperson in effect.  There shouldn't be a detrimental effect in the amount of roles available although in the short term, as companies within the financial services industry adapt there could be a small drop in the numbers of IFA's, financial advisers and therefore administrators and paraplanners required.  An equilibrium should however manifest itself within the medium term.  My opinion would be that short term it may have a relatively small effect but longer term, the financial services recruitment agencies would survive - we just wouldn't be working for multi tied organisations anymore. Simple really!