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Categories:Advisers,Regulation

Sants: People will not be excluded from advice under RDR

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FSA chief executive Hector Sants says the regulator is keen to ensure the RDR does not prevent people from getting financial advice.

Sants (pictured) was questioned about the RDR’s impact on access to advice following a speech he gave at the Association of British Insurers’ biennial conference in London yesterday.

RGA product development actuary Greg Becker asked: “I support the RDR but can see an unintended consequence being that large sectors of the population stop being serviced by traditional IFAs. What is being done to ensure these people will have access to some form of advice or guidance, other than the work being done by the Money Advice Service and its financial health check?”

Sants replied he was glad to see support for the RDR’s core objective of creating a better financial services market.

He said: “As we have been designing the RDR process and our interventions in that area to develop a better marketplace we are very conscious of the point the question has raised, which is that we want to make sure we have not excluded people from advice that they were previously able to get.

“A key element of making sure that does not happen is the delivery of an effective simplified advice regime.”

Sants added the development of simplified advice should be a joint partnership between the regulator and the industry.

He said: “We have recently recognised that in order to play our full part in this partnership of delivering effective simplified advice that more help and more clarity from the regulatory perspective would be useful.

“We will be publishing further documents on how we see simplified advice working in the next few months, and I very much hope that will address those utterly understandable concerns.”

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Readers' comments (36)

  • Does anyone actually care anymore? The overall dullness rating of RDR is huge. The fact is that from 2013 onwards the new world will appear and then we'll see who was right. Virtually every firm we talk to are focussing on higher net worth clients and expect their less flush clients to drift away, or be actively segregated (got rid of). There is a growing acceptance that RDR is only survivable by that strategy which also seems to be the conclusion some banks are coming to. Personally I can't wait for the MAS misselling horror stories to begin, garnished by the train wreck that is NEST. Provided that the blame isn't somehow directed onto the few remaining IFAs that is......

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  • I agree. The trend is for those who are remaining in "Advice" to concentrate on HNW clients. For everyone else they will find "compare the market" -style services are all that can be afforded. Clearly most of the population will not base this on sensible, considered decisions but on "promised" returns or gimmicky promotions.

    I have a bright idea...make Diploma level financial qualifications compulsory for the entire population and then they will be able to safely use the execution only services that they can afford!

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  • It's not just the RDR - overburdening regulation, regulatory and PI costs and risk to me forever in an increasingly litigious society mean that the cost of advice has gone up exponentially in recent years. I quoted a fee last week to set up a very small GPP, company didn't like the fee (neither did I really but when I itemised the costs it was correct and fair). The result is they will not set up the scheme now and will wait for NEST which will, for them and the employees, mean maybe 5 years 'lost' pension planning. Typical employee was 21 yrs old with £1500 pa going in, about £7500 and five years 'lost'. FSA 'looking at' simplified advice - been here before methinks and it's too late for hundreds of thousands of people anyway. RDR will just make the situation worse.

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  • re anonymous 8.35, I agree with the whole dullness rating of the RDR and its high handed aims. Why not give the consumer the CHOICE fees OR commission OR combination. The IFA will still be qualified.
    I was talking to an ex IFA last week that has left the industry and is now advising and selling renewable energy products and can't believe how the stress has gone and the income inproved. Yes there are brighter things after RDR...another industry

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  • With the greatest of respect to Hector Sants what he does not understand is that people, especially the poor and lower middle classes, need to be cajoled into financial planning action. To assume that people will go to a website to implement their financial needs is to not understand our industry.

    It is one thing to ensure that the advice given is good it is another to get quality advice out to those that need it. RDR will cater for the well off and those not so well off but intelligent enough to know that they need to put together a comprehensive financial plan, but it will ignore the rest.

    My limited brain thinks that the well off actually need little financial help but the poor need every possible assistance. Face to face meetings always generate more action than any other substitute. Less advisers in the market place will, as has already been mentioned, push all IFA's into the HNE's leaving the rest with an at best second class advisory method.

    I hope I am wrong. We will find out after 2013.

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  • So let me get this straight. The "solution" to making sure people will still get advice post RDR is "simplified advice". Simplified advice will presumably be LESS "good" than independent (or even restricted) advice from more highly qualified advisers.
    And the reason for RDR was apparently the lack of public confidence in adviser competence, and the specific consumer detriment caused by advice being given by less qualified advisers. So simplified advice appears to simply be an exact repeat of what supposedly caused the problem RDR was meant to solve.
    Brilliant. I am now reassured that all is well.

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  • I can't wait to see how Hector and his band of merry men believe simplified advice will work. Sants and his like live in a little vacuum where salaries of £100k plus are the norm and therefore paying a fee for advice is an option. Hector, in the real world things are slightly different old boy!

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  • Pick me up off the floor Hector, I cant stop laughing (or is that crying ?)

    Do you really believe this ?

    Will you fall on your sword if you (RDR) are wrong ? That would be the moral and principled thing to do wouldnt it !! After all, the buck stops with you surely ?

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  • Oh Boy, have you got a surprise coming your way Mr Sants.....

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  • proves he has no idea what ifas do for clients or what they want or afford or how best we are remunerated!
    Does anyone think that the advert put out by the Money Advice Service should be reported to the Advertising Standards Agency as misleading because it does not give advice?

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