TSC Tory calls for RDR grandfathering
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Treasury select committee member Mark Garnier has called on the FSA to allow grandfathering as part of the retail distribution review and reconsider its ban on commission.
Speaking to Money Marketing at the Conservative conference in Birmingham this week, Garnier branded the qualification requirements for existing advisers as “outrageous” and suggested that experienced advisers should be grandfathered as long as they demonstrate a certain level of knowledge and skills.
He said: “IFAs have been hit by the RDR and they are having to go out and take more exams. even though, in most cases, they are more qualified than the people at the FSA.
“The FSA is not allowing any element of grandfathering and it seems outrageous. I would be very happy for experienced IFAs to be grandfathered as long as they can demonstrate they have a certain level of experience, knowledge and skills.”
He said he supports an overall increase in qualifications for IFAs but it should be phased in over a longer period.
Garnier is Conservative MP for Wyre Forest and was formerly an investment banker who went on to set up his own investment management business. He called for the FSA to look again at introducing a flat rate of commission as an alternative to banning it.
He said: “The FSA should introduce a flat rate of commission across all products. If everyone charged the same amount, it would remove concerns about commission bias and consumers would know exactly how much they were paying, no matter what product they bought.
“People will not pay for advice by the hour. The service IFAs provide to consumers is incredibly important and valuable and I think we continuously interfere with the sector at our peril.”
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Readers' comments (92)
Keith Marshall | 7 Oct 2010 9:18 am
At last a common sense view on what will benefit the consumer most.
Qualification and knowledge are vitally important but so is the experience of knowing how to obtain, understand and then interepret clients circumstances.
That results in accurate and sensible planning.
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Anonymous | 7 Oct 2010 9:18 am
Halle-bloody-lujah
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Anonymous | 7 Oct 2010 9:19 am
I would thank Mark Garnier for saying what it appears he has in this quote. I have been saying all along, it is NOT the aims of the RDR which are the problem it is the combination of changes propsoed all at the same time and as reported today, the proposed increase in FOS claims from £100k to £150k will force PI cost up as cap ad requirements increase along with quals and the change to adviser charging. Anyone thing in isloation is doable (we've done adviser charging changes now, I was working towards quals and half way to inccreased cap ad, but there was still a risk I would not get everything done by then) Now looking at this latest straw, I think my back has broken and I will now just leave the job I have done since leaving school 25 years ago and I don't really care what I do now.
So to Mark Garnier, talk is cheap. The only people the FSA are answerable to is parliament, they've ignored evberything advisers have said for years (consultation does not mean you listen if your mind is made up), but even parliament, becuase of the way FSMA was structured can have little influence in teh time scale remaining for RDR implementation now.
I think I might go in to politics now...
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michael | 7 Oct 2010 9:22 am
is this man really a politician? - he talks perfect sense particularly in respect of standardised commission - whatever your stance is versus fees or commission
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Andy | 7 Oct 2010 9:22 am
Wow! a MP that talks sense, and he is on the Treasury Select committee.
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Iain | 7 Oct 2010 9:23 am
I didn't think any politicians had any common sense.Its nice to be proved so wrong.
Perhaps he could now go and explain these comments, slowly, to Mark Hoban
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Julian Stevens | 7 Oct 2010 9:24 am
I've met Mark Garnier and he seemed to be a very sound bloke, though whether or not his call for grandfathering will cut any ice with Mark Hoban is moot. But at least we have a voice in parliament, which is something.
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Anonymous | 7 Oct 2010 9:25 am
Allelujah and there was light ! A commonsense and realistic comment for once re RDR. Lets hope our possible new champion succeeds where the civil servants have failed.
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david horsey | 7 Oct 2010 9:27 am
if theFSA is to be disbanded put this man in charge now
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Chris | 7 Oct 2010 9:28 am
It sounds good on surface but hasn't this been covered before? Competition law - Providers of a service have the right to compete against their couterparts and charge whatever fees they like.
Only way to standardise things has been to ban commission altogether.
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