'Forensic economists' find IFAs generate just 2% industry revenue

Scott Sinclair
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Independent advisers generate just a tiny portion of the total net revenue produced by the industry yet contribute a far larger chunk of its annual costs, an economics team has found.

The initial estimates of a ‘forensic economics' business hired by AIFA to scrutinise the FSA's budget found the net revenues of IFA firms represent about 2% of the income of the financial markets regulated by FSA. However, it concludes advisory firms pay 25% of the regulator's total costs. "IFAs are therefore burdened with a disproportionate and unfair share of the costs of regulation which are ultimately and inevitably met by consumers," AIFA policy director Andrew Strange says. The findings of the forensic economists will form part of AIFA's response to the FSA's consultation on ...

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