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The Mcflipping point

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For anyone who makes a living from the printed or spoken word, one of the greatest pleasures of our work is the occasional ability to somehow conjure an indelible image in the mind’s eye using a few well crafted words or phrases.

Orators have the same gift and, by combining it with a particular delivery, they can create a mood and affect the way people think and behave for generations to come. Sadly, the financial services world rarely offers the opportunity to hear or read concepts spoken in an exciting manner, partly because the subject matter is boring or, more often, because the person voicing those views is.

Occasionally, there are elegant exceptions to that rule, thankfully. One of them came last week when I was reading Money Marketing editor Paul McMillan’s assessment of how Aifa director Rob Sinclair had “performed” when giving evidence to the Treasury select committee’s review of financial regulation.

As Paul remarked, Aifa tends to be unlucky when its representatives appear before MPs. Five or six years ago, director general Paul Smee was, perhaps unfairly, savaged by the committee over the trade body’s alleged failures to speak out over some misselling scandal or another.

This time, paradoxically, Rob Sinclair came in for a hard time over Aifa’s failure, or otherwise, to oppose the FSA’s retail distribution review strongly enough and highlight the fact that one of the RDR’s consequences will be to create an “advice gap” among consumers.

This advice gap had earlier been outlined by MoneySavingExpert’s Martin Lewis, who reportedly told members that he is “not the greatest fan of IFAs” but that they were “better than nothing”.

But anyway, back to Paul McMillan’s take of the hearing at which Sinclair made an appearance. Paul set the tone of the meeting by pointing out that while Aifa has tried to oppose certain aspects of the RDR, it also “decided a major confrontation over qualifications was unlikely to succeed with a regulator that was not for turning”.

I think this sums the trade body up very nicely. But it is Paul’s description of what happened next that brilliantly sums up both Sinclair’s demeanour and Aifa’s current stance: “Sinclair walks into the committee meeting to discuss the proposed restructure of regulation and is bombarded with RDR complaints.

“His response was more of a weary warrior explaining a past defeat in battle rather than the general preparing his troops for a fight that Andrew Tyrie and his committee were expecting.”

The only question I have after this impressively deft portrait is, does it potentially signify, as Paul hints, that were Aifa and financial advisers to push hard they might get a respectful hearing in their attempts to either water down or delay key aspects of the RDR, specifically the issue of qualifications?

Paul appears to think so. He points to the number of MPs who are now - belatedly - sympathetic to some aspects of the IFA cause and suggests that “if as we move much closer to the RDR it becomes clear that a large number of IFAs will not meet the new requirements, you would expect more pragmatism from the policymakers”.

That is certainly one possibility. Another is that the FSA will continue to push ahead with its plans and will be supported in that aim by Treasury financial secretary Mark Hoban.

Paul describes Hoban’s contribution to a discussion on the issue of qualifications as “unnecessarily antagonistic” in saying that “the current minimum financial adviser qualification is at the same level as a diploma in shift management offered by McDonald’s”.

As it happens, Hoban is, strictly speaking, correct, certainly in terms of the level accorded both McDonald’s qualification and the FPC by the QCA’s own accreditation system. In fact, you have to spend much more time in the classroom to obtain McDonald’s own shift leader qualification than I did to pass FPC1 and 2.

My concern with believing that the 7th Cavalry, in the shape of half a dozen or so Tory MPs, is poised to ride over the hill and rescue advisers from the task of sitting new QCF level four exams is that if it does not happen, IFAs will find themselves driven out of the industry.

Let’s be clear, even MPs do not believe they will be able to stop it from happening. Harriett Baldwin, MP, an alleged IFA supporter, was quoted in an interview as saying about the RDR proposals: “We have no ability to change the regulation.” Although she is among those in favour of some sort of grandfathering, she added: “The discussion may be too late”.

I believe she is right. IFAs have just under 800 days to get those qualification

Nic Cicutti can be contacted at

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Readers' comments (42)

  • I don't agree Nic.

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  • Nic often seems to incur many IFAs' (note,many of you, picking up on one of Nic's previous themes, the correct position of the apostrophe) wrath. I'm not one of them so, for the sake of some balance if nothing else: well-said Nic, well-said indeed!

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  • The debate amongst the MPs did not only focus on qualifications, which is what some reports would suggest but also on the huge detriment caused to the public by the removal of choice as to how the consumer pays for advice and this was recognised repeatedly by a number of MPs. It is this awareness of the unfairness in delivery of retail advice that is likely to be the impetus behind a proper debate in the House of Commons.

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  • I was so angry after hearing Hoban's words that I reached my McFlipping point & emailed Garnier, Baldwin, Vince Cable & my local MP.

    Incidentally I've taken 4 exams this year & passed, so almost there. So technically does that class me as a McAdviser???!!

    What level of advice does that put the Banc Assurance sector I wonder?

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  • I just read a newsletter from Harris Interactive and the sad truth is this illustrates why RDR (for all its faults) is required if advisers are to distinguish themselves from Banks in the eyes of the public.

    What is shows is that consumers
    * trust IFAs no more than they do Bank Advisers (56% vs. 55%)

    * think neither are sufficiently qualified (21% and 16%, Doctors score 90% in the same survey, even accounts get 60%!)

    * are equally concerned about commission bias when dealing with IFAs and banks (10% for both IFAs and Banks)

    The only glimmer of hope for those resisting the forthcoming changes is that 30% of consumers expressed a preference for paying by commission, but more people 31% said they didn't know!!

    Isn't it great to hear what consumers think for once in this debate.

    It's time to prepare for the changes and create a truly distinctive profession.

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  • I don't agree with him either.

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  • I think all policemen should be taken off the beat until they are qualified in law to that of QC level.

    The so called powers that be are terrified that us IFAs my leave the business and then the whole industry goes into turmoil.

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  • Why the FSA and Mr Hoban seem to assume RDR cannot be improved upon staggers me. It is as if they don't wish to deal with it rather than find a better solution partly because many MP's including Mr Hoban don't feel that they can instruct the FSA what to do as I have found out in letters I have received from Mr Hoban to my concerns.

    The FSA are a law unto themselves and even MP's I think are starting to believe that or if they get an awkward question then they use that as an excuse and say it is the FSA you need to talk to.

    Can you talk to the FSA I wonder, anyone had any success on that?

    Also why is Martin Lewis considered an "expert" to be before MP's giving his opinion?
    He is not regulated by the FSA and his website promoted Crown Currency Exchange as one of the best firms offering the highest exchange rates which went bust to the tune of some £20 million.
    Calling Mr Lewis to give advice before MP's further cements in the publics mind that he is just that an "expert" in financial matters and many will thus believe his web site is providing "expert advice" which it is not as it is just "information" as he often claims when things go wrong.

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  • I refer to Harriet Baldwins comments regarding "it may be too late for discussion" It does not have to be, RDR could be extended for further consultation bearing in mind that the FSA were considering stopping it at one of their Board meetings but did not want to "in case they lost face" So if they can consider that their must be plenty of time for further discussion. Considering the number of years that the FSA have been making their own rules, I am surprised despite lobbying that MP,s have left it to this stage to get involved. I accept that some were not in office and wer not able but the FSA has been operating like a run a way train without anyone in government trying to stop it.

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  • The FSA is fraudulent in its claims of claims consultations where none existed other than were fixed template websites designed and set by the same. Networks and product providers saw benefits in the gift of members trail as they exit and the whole sordid process stinks. The ideas behind RDR lack credibility and the commission bias is unproved (See Charles Rivers study). If the FSA was a local authority RDR it would already be in the bin and a third of the FSA jobsworths would be redundant and I’m glad that good people continue to fight for what is correct.

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