The Mcflipping point

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