I would like to start with some comments on VAT. I once went on a course where I was told this is the most off-putting start conceivable to a speech or article. But since Money Marketing's recent revelations, the most unlikely people have been talking to me about VAT.
Will VAT be a new cost burden on some of you? We will not know for some time. HM Customs and Excise has been quick to point out that recent publicity in MM is case-specific and we should not anticipate an imminent general ruling.
There may not be immediate developments but this is not an excuse for Aifa inaction. Customs and Excise makes some play of reflecting commercial reality in its judgements, rather than the regulatory position. But this does not mean it should totally ignore the regulatory position or that the FSA should not have a view of what is going on. So we are providing that enlightenment and stirring up others to take an interest so the eventual outcome is in touch with reality.
I promise to keep you informed of developments but do not expect them on a weekly basis. And please do not corner me at conferences and start talking about VAT. There is only so much excitement a man can take. I was going to be all strategic this month, as well. My fine thoughts on financial capability are going to have to be compressed into a mere paragraph or so. I know you were looking forward to them.
I suppose it is no surprise that financial capability is on the Government's agenda when it is on so few individuals'. (Is it only 35 per cent of adults who understand percentages? The other 80 per cent haven't a clue – an oldie but a goldie.) I suspect that lack of interest as much as lack of knowledge makes the old adage “insurance isn't bought but sold” such a cliche. But the FSA is giving us the opportunity to change this with its work on a financial capability strategy. I think we should welcome the initiative, especially if it unlocks funding from other sources for improving financial awareness.
Some advisers ask whether this is a subtle means of removing the need for advice. I disagree. The dawning of awareness is more likely to deliver a realisation of the real value of advice. I cannot think of any scrapes into which the industry has got itself over the last decade where it would not have been better placed if its consumers had not been better informed.
I may even make this point when I appear before the Treasury select committee the week after next. Details of my memorial service will be circulated shortly thereafter.
Paul Smee is director general of Aifa