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Aifa criticises late changes to adviser charging rules

Aifa has criticised the FSA for introducing “significant” changes to its adviser-charging rules with only 18 months to go until the RDR deadline.

The regulator’s quarterly consultation paper proposes new rules designed to ensure clients can cancel an ongoing advice service without having to withdraw their investments. It says this would apply where ongoing advice charges are linked to an overall service such as advice charges tied in with fund management charges.

Aifa director general Stephen Gay says: “It is a matter of concern when significant changes are made late in the day, particularly when they have the potential to add significantly to development costs and create greater turbulence and uncertainty.”

Yellowtail Financial Planning managing director Dennis Hall says: “I got concerned when I read about the amendments to adviser-charging rules in particular. There is not much time left until the RDR and the FSA is shifting the goalposts quite significantly.”

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Comments

There are 11 comments at the moment, we would love to hear your opinion too.

  1. and I bet this isn’t the last change they make!

  2. Bit late really AIFA.

    You had your chance to make a difference for advisers when this all started.

  3. Julian Stevens 10th June 2011 at 9:25 am

    Does this announcement of the FSA’s latest proposals constitute a consultation or is it a case of This is what you’re going to have to do, so just get on with it?

  4. Harry Hawkwind 10th June 2011 at 9:26 am

    With all the uncertainty and the fact that the FSA don’t appear to know what they are doing and keep moving the goalposts they should do the decent thing and for once Treat Advisers Fairly and extend/delay the RDR deadline until they can categorically inform and confirm the structure and requirements

  5. Not only is it a bit late in the day for AIFA but those few IFAs that were backing the FSAs proposals for RDR were warned by many others that the unfair and unnecessary changes would not be the end of it. If you give your backing to a bunch of nazis you better be prepared for whatever they bring in.

  6. John Blackmore 10th June 2011 at 9:45 am

    I don’t know what the Halo brigade are moaning about.

    I’m happy to taking ongoing trail for making a sale. You guys want to be professional and have stopped me taking trail. Now you are moaning if a client decides that they want to stop paying for your on going advice – tough

  7. Quote for the day.

    Nothing in the world is more dangerous than sincere ignorance and consciencious stupidity.

    Martin Luther King.

  8. Not sure what all the fuss is about this ability for customers to change or cancel an ongoing service has been in the draft rules singe the end of last year? Has anyone read the papers or are people only reading the press coverage I wonder. The problem is if a customer cancels and moves about a fair bit to get cheaper servicing then are the providers going to be able to keep up with it all and how long will it take to cancel that expensive service for a cheaper one with a different adviser?

  9. Our industry is always at risk of clients moving elsewhere so what is different here? If we build relationships with clients, and they can see that they are getting a value enhancing service from us why would they want to cancel their fee agreements? The days where advisers get money for old rope are gone. But then we knew that once RDR was instigated. Didn’t we?

  10. I haven’t read the amended paper (yet). But our Client Agreement says the client can cancel our ongoing service at anytime, so I don’t see what has changed? They can transfer the agency on historic plans we have at any time too (although I know some providers didn’t use to allow this, including Skandia I believe).
    Up front advice costs can only be spread over I think it is a max 2 years post RDR and then only if in connection with a regular savings and NOT lump sums.
    So unless I have missed something, as such I don’t see it as an issue….
    Have I missed something Dennis?

  11. Julian Stevens 10th June 2011 at 4:38 pm

    Oh yes ~ what are you going to do, AIFA, if nobody takes the slightest bit of notice of what you’re saying (as seems usually to be the case)?

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