[kirushanth]

When we do a Friedel Crafts Alkylation, using AlX3 also includes rearrangement. To prevent that, we do an acylation and then a reduction of the ketone. My friend told me usage of FeX3 doesn't involve rearrangement in alkylation itself. Is he right?

[Schrödinger]

The concept is the same in both the cases. Both being Lewis acids, will abstract that halogen and transform  the alkyl halide into a carbocation. Hence, rearrangement is possible in both the cases, whether AlCl3₃or FeCl₃. I don't think Fe is special in any way, although I might be wrong.  Maybe someone who has had practical experience with this in the lab can comment.

[kirushanth]

I told him exactly that. He said:
Consider the case of chlorine.When we use FeCl3, it pulls Cl- weaker than AlCl3 and so, as a result, Cl is partially attached to the alkyl group still clinging with it, ever after it was taken by FeCl3. The carbocation is not fully formed and as a result, this does not allow rearrangement to take place.
I found this rather surprising and decided to ask the forum experts.

[Schrödinger]

Unless you have experimental evidence, these sort of questions tend to be open-ended. In organic chemistry, one can always argue saying that some factor x is more important than factor y, but unless you have experimental evidence, I guess it's difficult to really say for sure.