St James's Place opposes oral RDR disclosure
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St James’s Place is lobbying against the need for any oral disclosure requirements for restricted advisers but says, regardless of this, the RDR will allow it to better explain the firm’s strengths.
In a management briefing note, seen by Money Marketing, SJP group development director David Lamb says the company does not support any form of oral disclosure for restricted advice.
But he says: “The greater flexibility proposed by the FSA in how firms can describe the services they offer will, we believe, enable us to do more to explain the strengths of the SJP proposition, including our distinctive approach to investment management, the quality and experience of the partnership and our advice guarantee.”
The FSA’s latest RDR consultation paper proposed oral disclosure to ensure that the lines between independent and restricted advice are not blurred.
Aifa director general Chris Cummings says: “It is disappointing that firms are looking for ways around the rules. We have already heard of tied firms looking to sidestep the requirements and we have brought those to the FSA’s attention.”
Lamb believes that networks using a panel of providers should not be allowed to be called independent.
Sesame Bankhall Group chief operating officer Stephen Young says this is a misrepresentation. “SJP has closed panels and its advisers have no choice but to use those panels. Our advisers can use any provider in the market, there are no restrictions at all,” he says.
An SJP spokeswoman says: “As stated in the management note we support the proposed distinction between “independent” and “restricted” advice and have confirmed this in our response to FSA. We also agree with the proposal as set out in para. 2.2.6 of CP09/18 which states:
“‘We are not mandating a precise form of words that firms must use. The requirement is simply that the disclosure must include the term “restricted advice”. So firms will have flexibility to explain to clients what restricted advice means with reference to the particular service they are offering.’
“Following on from this, the comment in the management note reflects our view that alongside being entirely clear to clients that we are offering restricted advice, we will be able to explain more clearly the strengths of the SJP proposition.”
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Readers' comments (6)
Anonymous | 26 Nov 2009 10:27 am
As a previous S.J.P. Partner it never ceases to amaze how they duck and dive and continue to pass themselves off as something unique and independent, when in fact they are have a very limited expensive offering that is no where near Independent the F.S.A. Must look very carefully at there T&C Scheme now in in particularly post 2012
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Peter Roberts | 26 Nov 2009 10:54 am
As an IFA for 20 years I spent a great amount of time researching the investment markets and generally came up with the same top fund managers that the SJP option finds as acceptable and reliable, the added benefits offered to clients by the SJP investment committee and Stamford associates vetting and monitoring the fund managers does provide added benefits for the clients and offer more protection and satisfaction to them.
Performance wise SJP funds stand above many well known named funds available. I am now an SJP member and my clients appreciate the added protection and service available to them through SJP.
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Dan W | 26 Nov 2009 10:55 am
Sounds like they are running scared and have something to hide.
In my view, if you believe your fees charged/costs involved are fair and represent value, you should have no shame in orally disclosing them to a client. In fact, you should be able to hold your head high and sell your proposition without any doubt.
If you are afraid that by telling prospects/clients the truth (i.e. that you are offering limited advice and therefore unable to justify high fees), then you know within yourself that you have to lower fees and refine your business model, unless you have a specialism that truly offers clients something extra.
Hopefully the FSA will stand strong and let loose competition, which should ultimately help clients understand the cost of the advice/service/products they receive.
Clear, up front and honest discloseure will root out those dishonest and incompetent advisers/salespeople that have plagued the industry and tarnished its image for so long. Although, in saying this, there will still be the banks et al to deal with....
It is now becoming even more clear how the RDR will improve the standards of INDEPENDENT financial advice, bring greater value to clients (as those IFAs left standing will compete on price and service) and help such advice differentiate itself from the mass market sales culture and should be embraced by all serious IFAs and true, honest financial advisers.
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Evan Owen | 26 Nov 2009 11:02 am
I am surprised, not.
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Graeme Urwin | 26 Nov 2009 11:08 am
Hook & Squirming comes to mind.
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Dan W | 26 Nov 2009 12:14 pm
Sounds like they are running scared and have something to hide.
In my view, if you believe your fees charged/costs involved are fair and represent value, you should have no shame in orally disclosing them to a client. In fact, you should be able to hold your head high and sell your proposition without any doubt.
If you are afraid that by telling prospects/clients the truth (i.e. that you are offering limited advice and therefore unable to justify high fees), then you know within yourself that you have to lower fees and refine your business model, unless you have a specialism that truly offers clients something extra.
Hopefully the FSA will stand strong and let loose competition, which should ultimately help clients understand the cost of the advice/service/products they receive.
Clear, up front and honest discloseure will root out those dishonest and incompetent advisers/salespeople that have plagued the industry and tarnished its image for so long. Although, in saying this, there will still be the banks et al to deal with....
It is now becoming even more clear how the RDR will improve the standards of INDEPENDENT financial advice, bring greater value to clients (as those IFAs left standing will compete on price and service) and help such advice differentiate itself from the mass market sales culture and should be embraced by all serious IFAs and true, honest financial advisers.
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