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Categories:Politics,Regulation

Backbench MPs continue attack on the RDR

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Backbench MPs have continued to express deep concerns over the impact of the RDR in a debate in Parliament this morning.

The Westminster Hall debate, secured by Conservative MP Harriett Baldwin, had 13 MPs speak to support of constituent concerns about the RDR.

Baldwin said the RDR is likely to reduce access to finance in rural areas and hit sole trader IFAs hardest.

She said: “In London, for access to financial advice it does not really matter if one person goes out of business there will be lots more financial advice available but in rural constituencies it will have a significant impact.”

She added: “Experienced IFAs, who are often sole practitioners are going to find it hardest to take the time required to pass these specified exams.”

Baldwin said that this was the first time the regulation of financial advisers has been debated in the house of commons. “You have to ask why,” she said.

Other concerns raised during the 30 minute debate included the cost to consumers and the reduction of access to advice for smaller investors.

Treasury select committee member and Conservative MP Mark Garnier asked Baldwin to work with him to secure a backbench business debate so the issue could be debated in the main chamber.

Treasury financial secretary Mark Hoban said members should support the objectives set out by the RDR.

He said: “The current minimum financial adviser qualification is at the same level as a diploma in shift management offered by McDonalds. The products that are being sold by IFAs are infinitely more complex and long lasting in their effects than a Big Mac.”

Hoban added: “Investment advice will be seen as a professional activity, financial advisers will have a new status and I believe fresh talent will be attracted to the industry.”

He said: “The FSA report that rather than being put off by study many financial advisers are going on to obtain more advanced qualifications than those required by the RDR.”

He acknowledged that people have concerns about meeting the new minimum standards but, he said, with two years to go until RDR comes in half of advisers already meet them.

He said: “Many financial advisers feel that should be grandfathered so that those advisers with experience are exempt, the question is how do we know how good those advisers actually are?”.

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Readers' comments (40)

  • "Big Mac" Hoban didn't allow any questions or debate from the floor - I wonder why?

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  • Outrageous comment from Mark Hoban. Who is paying this guy?

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  • ...And there's the rub - the current level of qualification required to advise on complex financial matters is no higher in status than that required to manage a shift at MacDonalds.

    The way forward is clear. We have to somehow raise the bar for entry into the industry if we want to have a profession worthy of the name profession.

    The 2012 deadline to achieve the already watered down Diploma is not unrealistic, especially as this deadline has been pretty well fixed for at least 2 years.

    Asking someone to sit a handful of what are relatively straightforward exams in 4 years is not unreasonable. If those advisers have not yet begun to get to grips with this then who's fault is that? In fact it is not unreasonable in my view to pass these exams in 2 years, especially if those people have, as seems to be the regular claim, years of experience - they (should) already know most of the syllabus!

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  • Hoban proves his ignorance by the stupidity of his ridiculous statement. Obviously he has no knowledge of financial services at the sharp end.

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  • Whilst the original intentions of the RDR were probably laudible it has become horrifically over-engineered by FSA and other interested parties.

    We have all lost sight of what the RDR set out to do and it has taken too long to implement are we surprised that the intended thoroughbred horse has become an overweight camel.

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  • If Mr Hoban is unsure of how good an adviser is I would direct him to the FSA.
    If he thinks having a certain qualification is a guarantee of competence I'm afraid he is in cuckoo land

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  • Hoban said: “The current minimum financial adviser qualification is at the same level as a diploma in shift management offered by McDonalds.”

    He added: “The products that are being sold by IFAs are infinitely more complex and long lasting in their effects than a Big Mac.”

    THE ONLY CLOWN HERE IS NOT RONALD it is quite clearly MARK HOBAN!!!


    First of all its the BANKS that need regulating hard and fast!!!

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  • The fact Mr Hoban did not reportedly allow any questions or debate pretty much says it all.

    RDR is a done deal whether you like it or not and no debate on the matter is to be allowed.

    That is democracy Hoban style.

    We keep hearing about fairness, responsibility and justice are the key objectives of this new Government, but I don't see any of that here.

    Maybe McDonalds is where Mr Hoban gets his advice from!!

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  • I think what I am looking for now are two things:
    1. An end to this ridiculous Gapfill idea which flies completely against the previous 'no regrets' policy.
    2. That the FSA guarantee to us that after RDR they will leave the rules alone for a minimum period of 10 years in order that we can actually see if they work. None of the other initiatives over the past 20 years have been given more than a couple of years before they've been changed. I need to know whether I should invest in my business or whether it will be subject to sustained regulatory attack.

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  • I am not an IFA, I am an investor.

    Today Hoban said said that members should support the objectives set out by the RDR. I do not think that there are many people who do not support the objectives. They have little to do with what the FSA has actually produced.

    He said: “The current minimum financial adviser qualification is at the same level as a diploma in shift management offered by McDonalds.” What a silly remark. Just because they may have a similar number does not mean they are comparable. My own adviser has the the highest qualifications that have been available over the last few years and will still not satisfy the requirements of the FSA/CII.

    The matter of commission v fees does not seem to concern him. It does me. My adviser will charge me a fee next time I ask for advice. This fee may attract VAT. As someone about to start drawing my pension, I will not want to pay a fee. It is absolutely clear, and has been for very many years, what commission will be payable as it is shown on the illustration. What is wrong with having a choice?

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