The OFT has a fetish for supporting what it feels is `true' competition

IMAGINE GOING to see your independent financial adviser at the end of a tax year. You have an urbane discussion about topping up your pension, with the IFA selecting the product to suit your needs among the scores on the market.

Then it's the turn of what unit trust to opt for. "Ah, sorry," the adviser demurs. "I can tell you about only three companies. If you want greater choice, you will have to go elsewhere."

This, believe it or not, is the new scenario envisaged by the Office of Fair Trading. Days ago it proposed that the existing system, known as "polarisation" be scrapped in favour a "multi-tie" approach.

Polarisation basically means either you go to an IFA, who can choose the right product from many on offer, or a salesman who sells only one company's products.

The OFT wants to allow salesmen to "tie" with several companies, blurring the distinction between genuine IFAs and salespeople.

OFT chiefs say pension and life insurance products are hard to understand, so this independent advice will be allowed to continue. And unit trusts are "transparent" how they operate and don't need the same level of advice. Multi-ties should be allowed here.

What rubbish. The truth is that pensions AND unit trusts are potentially simple products, if companies design them that way. Pensions are long- term only in the sense that their benefits may be enjoyed 10 or 20 years down the line.

But most people are likely to contribute to such a scheme for a few years at a time. Life circumstances change, we fall in and out of jobs, get divorced, have children or stop work to look after dependents.

What is needed is advice on the best-value, most flexible pensions with good potential long-term performance. That level of advice is little different from a unit trust, where charges can suck huge amounts from a fund's value and where performance is critical.

Why should the selling of unit trusts and pensions be treated so differently?

Polarisation, for all its faults, is generally well understood and gives genuine and non-confusing choice of advice or salesmanship, but the OFT has a fetish for what it believes is "true" competition, the right of insurance salespeople or advisers to do what the hell they want. So it invents a false distinction between different types of products and the advice needed to sell them and suggests a solution to a problem that doesn't exist, at least, not the way the OFT imagines it.

I hope these proposals bite the dust - or consumers will be much the worse off.

`The Independent' has a free 20-page `Guide to Independent Financial Advice', which tells you the areas in which an IFA can help and how to finding one. The guide, written by Nic Cicutti, personal finance editor at this paper, has a list of names and telephone numbers where you can go for help. Call 0117 9712932 for a copy