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&#39IFAs have an important role&#39

MM: There is a perception in the industry that the Government appears to be listening more these days. Do you think this is the case and if so, why?

RK: I certainly approach things with an open mind and I am always keen to talk to the industry to hear what it has to say.

MM: You made some fairly positive comments about the value of independent advice in recent weeks. How important are IFAs?

RK: I think independent financial advice is always going to have an important role to play. I am convinced that people will always need to take financial advice on complex decisions about their life savings and investments so I see them having an important role in the future.

MM: How active is the Treas-ury in the ongoing polarisation debate, is it a matter of the FSA making a recommendation and you accepting it, or do you have input?

RK: My view is that consumers are becoming more discerning and there is a clear need for independent financial advice. The polarisation regime was developed many years ago in a slightly different context and there could well be room for some degree of change but I think it is really up to the FSA themselves to consult with consumers and the industry as to how the situation may be developed.

MM: When you say there could be well room for a degree of change, what is the motivation behind that?

RK: It is to accommodate the changing aspirations and needs of consumers. We are going to have to do this on two fronts. We are going to have to be able to provide consumers with products which are simple and easy to understand and easy to compare with other products. We are also going to have a system in place in which they can receive independent financial advice and in which if they choose to receive it, it is clearly independent.

MM: How set in stone is the 1 per cent world?

RK: Well clearly the 1 per cent is not set in stone although it is understandable and is a figure that people can relate to easily. We consider it from time to time. But the evidence suggests the 1 per cent charge is something that has had wide effects on the market, that is driving down costs and is producing beneficial results.

MM: Is not also true that the existence of a 1 per cent cap on charges is making it increasingly difficult for insurance companies simply to make ends meet and deliver these products?

RK: Well, they do not have to promote Cat-standard products if they do not want to. If they do not feel it is in their competitive interests to do so then that is a choice they make. But clearly it is the Cat standards which are something that consumers are attracted by and are having a large impact on the market which is beneficial to consumers.

MM: Another of the ongoing issues is annuity reform. Where does the Government stand, are you actively reviewing annuities or thinking in that direction?

RK: I am sympathetic to those people who argue there should be greater control over their own finances. I understand where they are coming from and I understand the frustration they feel at being locked into an annuity. But the driving force behind the current annuity regime is quite readily understandable. People need to provide themselves with a retirement income which is secure for as long as they live. The current annuity regime is one way of delivering that goal.

I am very open-minded about the arguments for change but the fact is that the proposals that are put forward must both be workable and full and so far no one has come in with an idea that meets both of those criteria.


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IFA and Network Whitechurch Securities chairman Kean Seager has slammed big network chiefs, accusing them of being “fat cats dining on the cream” by overcharging IFA member firms.Seager, who set up the Whitechurch Network last year, attracting 50 firms, att-acks the bigger networks for “milking” IFAs through high charges, saying firms get little in return […]

Mortgage Express appoints new product development manager

Mortgage Express is appointing David Connolly as its product development manager, working from its New Barnet headquarters.Connolly joins the Bradford & Bingley Group specialist lender from Woolwich where he was mortgage product development manager.Mortgage Express head of business development Tim Sturley says: “He is a dynamic character with a clear vision for the mortgage industry. […]

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