Turn around: man in the middle must show his true face for financial advice

Sam Dunn asks if the new 'multi-tied' system will ensure consumers get the right products at the right price

They won't get their own TV show, but financial advisers are about to have a makeover. In a bid to give consumers more choice and make it easier to compare costs, a new sales regime called "depolarisation" and a new breed of advisers arrive on 1 December.

They won't get their own TV show, but financial advisers are about to have a makeover. In a bid to give consumers more choice and make it easier to compare costs, a new sales regime called "depolarisation" and a new breed of advisers arrive on 1 December.

For years, the system for guiding financial consumers has been split, or polarised, between independent financial advisers (IFAs) and tied agents. The former search the whole market for financial products and the latter just one firm. While this system may have been straightforward, it has been heavily censured for failing consumers.

Tied advisers usually work for a life insurance firm or bank and have often resorted to shifting dull, uninspiring products. Meanwhile, commission-hungry IFAs have generated suspicion of bias towards those products offering the juiciest rewards. This hasn't always been the case but a series of mis-selling scandals, including the high-income "precipice" bonds and complex split-capital trusts that lost investors hundreds of thousands of pounds, has hit confidence.

The new regime that kicks off on Wednesday will aim to steer a course between the two extremes by creating another option with a new tier of adviser: "multi-tied".

This salesman will offer products from a small, select panel of providers - so whether you're looking for a pension, unit trust or life assurance, you won't be steered to just one firm or given the chance to play the whole market. Instead, you will be given guidance on a limited range of products in which the adviser should be able to acquire some in-depth knowledge.

The way we pay will change too under the new regime. Although some IFAs have already begun to offer the choice of paying a fee upfront for advice instead of commission, anyone calling themselves an IFA must now offer this option.

The reforms also include a welcome drive for transparency, with all advisers having to provide clear information to consumers before they buy any products. A "menu" document and charge sheet will explain the different ways to pay and how the adviser's level of commission, say, compares to an industry average.

And if the adviser is more than 10 per cent owned by a particular company, a notice should alert you to this.

Such openness will hopefully encourage those seeking financial advice to do what they do with any other product - shop around, says David Elms, chief executive of the IFAP marketing group. "Many people think financial advice is free but it isn't. They need to see that it has value."

The great hope behind this shifting landscape is that more people will begin to consider saving and investing.

However, although the new system won't be fully up and running until the middle of next year, concerns have already emerged. The number of IFAs, currently around 25,000, is expected to decline, warns Patrick Connolly of IFA John Scott & Partners. "It will fall because of regulation and compliance costs and [fear of] business being taken away from them by banks moving into multi-tied."

With six months to go, IFAs, life firms and banks still have time to decide what form they will take. Some have staked out their pitch early: Bradford & Bingley has decided to ditch its IFA arm and align itself with insurer Legal & General as a multi-tied adviser. On the other hand, the Nationwide says its life arm will stay a tied adviser and only offer its own products.

Meanwhile, consumer groups including Which? worry that, despite the new information sheets, individuals won't realise they are being given advice from a limited range of products.

Other complexities are set to emerge as some advisers wear different hats for different areas. They may offer tied advice for life insurance, say, yet scour the whole market for equity individual savings accounts.

And since many people take out at least one other financial product when buying a mortgage, for example, knowing what sort of adviser you're dealing with is essential in getting the best deal.