View more on these topics

AIFAs view

So, farewell then, FSA projection rates. An FSA discussion document will shortly canvass the idea of scrapping the projection regime.

I have never understood why the regulator should oblige firms to offer figures which may well turn out to be spurious in the light of events to consumers who are unlikely to understand the economic variables.

But will their absence create a vacuum for advisers? I suggest that this may be a further driver in the direction of good follow-up work with clients. The problem with projection rates, especially with the regulator&#39s sanction, is they look far more authoritative than they are. They need to be kept under regular review by a qualified adviser as part of continuing contact with the client. This is another demonstration that after-sales service can be the IFA&#39s secret weapon (and be set out in the menu as an indication of what value is being offered by the adviser).

I do believe it has been concerns over commission, however exaggerated, however misplaced, which lie at the heart of many of the regulatory initiatives of the last decade.

Commission has been long misunderstood but it is for the industry to clarify the misunderstanding. It should be put in its proper place as a means of paying for a service, not as a central concept in its own right.

Of course, the willingness of consumers to use commission as a means of remunerating advisers has to be recognised. The real task for the industry is to show what the commission is paying for. It should not be a means of concealing costs and sheltering behind the myth of free advice. If advisers are worthy of their hire, then they have to be confident enough to set out their services, secure in the belief that their value for money is unquestionable. The menu should be the means for doing this. But again, the menu is a means, not an end in itself.

That is why I am so passionate in pushing the industry to make the most of the menu as a vehicle for showing both their value and their value for money. If the industry decides that obfuscation is the easier and more comfortable option, then others will come in with ever more complex means of disclosure and with little appreciation of how cost must always be related to value.

Paul Smee is director general of Aifa


Standard fears Revenue tax move will hit offset loans

Standard Life is warning that a tax crackdown by the Inland Revenue may mean that borrowers with an offset mortgage will have to register their loan with the Revenue. Tax specialist Simon Burke says although there is no evidence that offset mortgages are being targeted, they do fall within the scope of regulation published two […]

Sizing up employee benefits

Can smaller IFAs – even protection specialists – compete in the employee benefits market or is it one for the big firms and consultants? Distribution within the market has often been dictated by matters of scale including the size of the client workforce and of the IFA and resources available to it. Consultants have inevitably […]

Product Matters

Pinder, Fry & Benjamin specialisesin the structuring of property partnerships and the purchase of properties by those partnerships. Its next purchase is Becket House, a building next to Waterloo Bridge occupied by Ernst & Young. Its Gold Nine Property Limited Partnership is an interesting and different form of investment that may appeal to those who […]

Sales interviews for stakeholder products will be pre-scripted

Sales inteviews for selling the stakeholder products will be pre-scripted by the firm, and the sales person will have clear limits on the issues the can advise on. Firms will have to be FSA authorised but sales advisers providing basic advice will not be required to have any financial qualifications.

To be and not to be – Multi asset investing with conviction

At Pictet Asset Management we believe active management of asset allocation is the most important generator of returns. What is not to be in our portfolio is just as important as what is to be because good performance is determined as much by the assets you avoid as by those you hold. The FP Pictet Multi Asset Portfolio managers are not wedded to any particular […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm