I did enjoy my holiday but I could have done without a return marred by the continuing Financial Services Compensation Scheme saga. I would also prefer to be able to give a more upbeat assessment of this situation than a comment that discussions with regulator and providers are continuing. But that is where we are at.
I do deplore (good word, for which thanks are due to the Treasury select committee) the tone of some of the FSA comment, when it is clear that the reason for IFAs' inability to meet these unexpected invoices is not budgetary failure but a lethal cocktail of circumstances. I do hope that pragmatism will prevail when push comes to shove and I am grateful for the FSA's offer to talk to providers.
And to think that it was Aifa which actively encouraged the FSA to move its invoice date from July to August so that tax payment dates were avoided. But we are pressing on and will keep our members updated. We certainly are pressing the regulator to demonstrate more understanding towards those IFAs which are genuinely unable to meet these bills in the timeframe expected.
I wish that I could give a firm timetable for resolution of these issues but I can only really make assurances about the priority which we are giving the issue. I will not labour the point. There are other things on the boil although it may not seem like it.
This is the autumn of depolarisation – final rules perhaps in November, a start date in January next year? Who knows? But we are nearing the denouement of a saga which started in January 2002 with CP121. Much water, not to mention blood and sweat, has flowed under the bridge since then. The defined payments system was buried in a pauper's grave, the menu emerged and expanded until it took centre stage.
I reckon that we are approaching the point where businesses can determine how they wish to respond to depolarisation. There is no fixed deadline for deciding this. But six months after the start of depolarisation (by June 2005?), those which wish to retain the independent label must offer advice across the whole of market and the option of being remunerated by fee. If no fee option is offered, then the business cannot call itself independent. Of course, businesses need not rush into deciding on a change of status – the rules are permissive, not mandatory. But there is an immediate need to think through the implications for you and, most important, your clients.
At some point, a wake will be held to mark the passing of a polarised market and I would like to be invited to give the oration. Polarisation has served the consumer well. It has enabled the concept of a community of advisers, independent from providers, to take root. Its demise is to be mourned. It can be credited with putting advice on the map and allowing the idea of a profession of financial advisers to be born.
But it is on the way out and now is the time to adapt the skills learned in the polarised world to the new format. I can only hope that the focus on advice is maintained as I believe that it is in that direction that happy clients and sound businesses lie.
Paul Smee is director general of Aifa