There’s a brouhaha brewing among independent financial advisors in the U.K. over new rules to be brought in by new super regulator, the Financial Services Authority, according to a report in the Financial Times.

IFAs are expected to lose their monopoly on providing independent financial advice under new rules to be proposed by the FSA next year.

Currently, there is a strict distinction between independent advisors and those who are captive salespeople for a single company.

The FT reports that Sir Howard Davies, chairman of the FSA, intends to do away with the distinction as part of a reform plan. “The news is certain to infuriate financial advisors, who have been lobbying all year for the split — known as “polarisation” — to be retained,” says the FT. “They argue that consumers would be confused if salesmen were allowed to work for multiple companies, as it would not be clear what was meant by independent.”

Paul Smee, director general of the Association of IFAs, said he did not want to see polarisation changed. “If change is handled badly, it will be disastrous,” he said. “Anything that dilutes the concept of independence is bad for consumers.”

The FSA will reportedly also look at training requirements, which Davies said needs reviewing to test whether it has the “perverse effect” of pushing up costs and putting off consumers.

With the FSA being touted as a possible model for Canadian regulatory reform, its performance will be closely watched here too. It officially becomes the U.K.’s only regulator effective December 1.