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Advisers slam Miliband rip-off claims

Advisers have accused Labour leader Ed Miliband of bandwagon-jumping and failing to appreciate the changing marketplace after he called for an end to “rip-off” pension charges.

In London this week, Miliband (pictured) said if Labour were in power, he would introduce a Consumer Bill in next week’s Queen’s Speech to give the regulator and the Competition and Markets Authority powers to “stop rip-off surcharges by banks, low-cost airlines and pension firms”.

Evolve Financial Planning director Jason Witcombe says: “It is a lovely bandwagon to jump on. Surcharges are annoying and throwing pensions and banks in allows a bit of bank-bashing which everyone loves but transparency is increasing and if people know what they are paying, then they can make a proper choice.”

One Life Wealth Planning financial planner Nick Evans says: “It should not be for regulators to have an ultimate say on how firms make money, as long as that firm is being transparent.”

Max Horne Financial Services partner Max Horne says: “If you have regulators pressing down on prices, you end up with vanilla products that might not work for clients and you run the risk of firms not being able to make money.”

The new Financial Conduct Authority is intended to be a “value for money” regulator. It will not directly regulate prices but will try to spot consumer detriment and flaws in competition by looking at “comparative prices”.

In February, Labour Shadow Treasury financial secretary Chris Leslie said he wanted the FCA to regularly review product pricing and make recommendations to ministers if it identifies a need for intervention.

Miliband raised the issue of pension fees and bank charges in January in an attack on “rip-off” Britain. He warned against “underhand predatory” practices and said if charges do not come down, he would move to cap them.


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There are 12 comments at the moment, we would love to hear your opinion too.

  1. I think that I could suggest a counter-accusation that Mr Milliband is breaching the Trades Description Act by calling himself leader of the Labour Party

  2. Fully Informed 3rd May 2012 at 10:20 am

    Get used to it IFA’s. Have you seen the polls? There needs to be a cogent argument on pension charges and other charges rather than just Labour or politician bashing.

  3. people who know nothing about business should not interfere with it.

  4. Could someone explain precisely what a ‘surcharge’ would refer to?

    Do they mean the cost of advice, the cost of the fund, perhaps the funds additional expenses, the cost of accessing the invesment via a provider?

    If a client wants to invest into a pension they only have the choice of avoiding one (advice) but if they opt to seek advice is it being suggested that advice should be free?

    It’s a democracy – they don’t have to take advice.

    Perhaps he’s disucssing active vs. passive.

    Maybe it’s the cost of a wrap vs. buying a fund supermarket.

    Perhaps it’s rhetoric!

    #rant over

  5. Advisers and their clients are being ripped off by the politicians and unaccountable quango regulators, on a daily basis
    Do not vote for ANY of them..Millyband and his ilk are only out for themselves. None of them give a toss about anyone else. All they want to do is feed their own ego whilst lining their pockets.

  6. Maybe Mr Milliabnd should stop and think for a moment befroe making himself look like a total prat. We are all in business to make a profit – end of. If our costs go up, like every other business we must pass these on to customers. If he came up with a workable scheme to greatly reduce our costs and these savings were not shown to be passed on to clients then he may have something to shout about. Until he learns how these products work and what the charges are actually for he really should stay quiet. Then some people may actually give him a bit more respect and listen. Here endeth todays lesson. Bless you my children

  7. I’m with Paul above, what is the ‘surcharge’ he is referring to.

    Sounds like Bandwagon Jumping. How can a MP ever have a full knowledge of all the the things they comment on. With the exception of those who have worked in a particular field they are generally career politicians.

  8. Nigel Tinsdale 3rd May 2012 at 1:11 pm

    Mr Miliband’s very own pension is ripping off tax payers, it is not good value. All public sector pensions offer poor value to the tax payer, that is the rip off.

  9. What choice do we have?

    Hoban is in and he’s useless. Cable is a bigger disappointment than Spurs and Milliband, like the obsequious Ed Balls, is a disaster that one day might happen.

    In short, they are all idiots.

    1….Last month I was approached by a good friend to help him review his pension fund. He is age 63, he has circa £350,000 in his fund and is certain that if I had not ‘twisted his arm’ and ‘sold’ him the pension policy that he would have little or nothing in his fund. He knows it is not a fortune but he is incredibly grateful that he was sold the policy. (Including the charges & commission!)
    2…. I also had a client who died last year at age 47 and his widow got the benefit of some very large life insurance that was sold by me to her husband. She was incredibly grateful that I had sold him the policy and she obviously made no mention of the charges or commission.
    3…. Recently, a very high profile client thanked me for selling him some Critical illness cover more than 10 years ago. He received a very large cheque and is now also in very good health. The doctors caught his cancer and he caught the very large cheque. Again, no mention of charges or commission.
    Correctly, we are where we are with fees and commission but I fear that cries of unreasonable charges from anyone, including politicians, will only discourage the consumer from signing up to products that the consumer really requires but do need to be ‘sold’.

    Don’t ever remember having a waiting list for any of the above contracts. So what is the answer?

    I believe the sector would benefit from some very strong political support and some focused dynamic leadership…. both aspects with some serious gravitas. With the appropriate strategy both of these goals could possibly be achieved. (No disrespect to our current sector leaders but I believe it is all far to fragmented) I am continually aware and disappointed at the constant bickering and negative comments (& most of that is just about each other) and also the lack of a common goals within the broad ‘advice’ sector. I am passionate about financial services (maybe I am not getting out enough) and if any of the current industry leaders who agree with my comments would like to discuss how we can ‘fix it’ then I will buy them lunch… A free lunch … not many about! Should add that I sold my IFA business several years ago and I am now enjoying relaxed consultancy work within the sector so if you do want that lunch then you must not stress me!

  11. Fully Informed……I would suggest you are far from it !

  12. Time after time these politicians make comments about all types of industry’s that they have little knowledge about . This is a typical comment that if he were to be properly challenged about would bring him back to earth with a bang . There are fantastic tax planning opportunities for most people to achieve through pension planning , saving for retirement is very important and needs constantly monitoring which leads to professional advice . Pension charges are far more favourable than they were 15 years ago , advisers are more professional. The fact that there is a huge savings gap , pensions in particular is down to political blunders in the past , the fact that nothing is ever set out in stone and clients and advisers are not confident that what is advised on now will not be relevant in 5 years time due to politicians constantly meddling with things. Cost savings never made anybody any real money you only have to look at the cat standard Isa’s and the take up with Stakeholder pensions , the fact is true diversification with assets within an investment WILL give advisersthe potential to add real value through porfessional advice and yes this may cost a little more . But the end result is what matters , for example i don’t go into a supermarket just to buy the supermarkets own brands because they are cheaper and neither i would suspect does Mr Milliband

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