June saw a continuing lively debate on the implications of the FSA’s interim feedback report on the future of financial services distribution.

While IFAs see it as an opportunity to differentiate themselves as true advisers, the banks are fighting a fierce rearguard action to have the proposals overturned.

Independent analyst, Ned Cazalet, warned that the FSA could face “high legal hurdles”, if it tries to carry through its planned separation of sales and advice, saying that the regulator should have given more focus to issues such as churning and the sustainability of business models rather than multi-ties.

But Pump Court barrister, Peter Hamilton, disputed this, saying that the meaning of ‘adviser’ should boil down to for whom the intermediary is acting: “If an intermediary is an agent of a product provider, then anything said to investors can be no more than a recommendation.”

Actuarial firm, Towers Perrin, meanwhile, said the RDR had failed to recognise that tied or multi-tied advisers can in many cases deliver a better service than whole of market advisers.

AIFA warned that the banks are fighting a rearguard action to get the interim proposals of the RDR reversed, prompting the trade body to reconvene its RDR working party, consisting of executives from the principal networks and a number of IFA firms.

But the FSA is reported to be standing its ground against heavy lobbying by the British Bankers’ Association, with FSA officials understood to have rebuffed calls from the BBA for a rethink on a primary advice channel. The ABI and the BBA are currently conducting research into assisted purchase with a report due in August.

However, the Smaller Businesses Practitioner Panel fears that the RDR may force some small firms out of business and push up regulatory fees.

AIFA director general, Chris Cummings, urged advisers to grasp the opportunity handed to them by the RDR by rising to the challenge and raising their game. The RDR proposals would give IFAs the chance to take sole ownership of the ‘advice tag’ and push out the sales people who are currently masquerading as advisers.

Cummings also welcomed the interim feedback’s stipulation that QCA level 4 should be the minimum qualification for advisers but called for membership of a professional body to be voluntary so that firms can differentiate themselves.

FSA RDR associate, William Tolmie, told delegates on PIMS not to worry about the timescale to conform with the RDR because the final shape of the regulation was not decided and because “qualifications take time to acquire.” CII head of policy and public affairs, David Thompson called for a transition period of four to six years.

Elsewhere, personal accounts continued to attract differing views. Ned Cazalet dubbed the government-sponsored pensions “a mis-selling scandal in the making” because of the effect of means testing on poorer workers pension pots, an issue much publicised by Scottish Life’s Steve Bee and pensions economist, Ros Altmann.

But Clerical Medical managing director, John van Der Wielen, called for compulsion, rather than soft compulsion, while a growing band of industry bodies is calling for  auto-enrolment for GPPs to be allowed before 2012.

Personal Accounts Delivery Authority, chief executive Tim Jones, admitted at a meeting that it would not be able to check whether contributions to personal accounts were correct and Alan Whalley of the Actuarial Profession doubted whether the two year timetable to test the new scheme was achievable.

Meanwhile, the Court of Appeal rejected the county court judgement which said it is unfair for advisers to have to pay a FOS case fee where a complaint is not upheld. Dolly and Brian Pickering of IFA firm Heath Moor & Edgecomb (HME) are to take their case to the House of Lords.

HME also lost another Appeal Court case in which it had argued that the FOS should follow common law when adjudicating complaints.

Elsewhere, investment bond business fell by nearly 40 per cent in Q1 2008 compared with the previous quarter because of the changes to the capital gains tax regime.

The ABI extended until 2014 the moratorium on genetic test results, allowing consumers to buy substantial amounts of insurance without having to disclose adverse results of predictive genetic tests.

Norwich Union is to join Legal & General by introducing postcode pricing for annuities from September.

Clive Cowdery astonished the City by making a play for Bradford& Bingley, along with some its principal investors, but then withdrew his offer when B&B refused to open its books.