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Alan Higham: Why I was relieved at Caroline Rookes’ adviser ethics comments

The adviser community needs to prove it can be trusted to play a key role in helping retirees.

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When I saw Money Advice Service chief executive Caroline Rookes’ comments a few months ago about her concerns around regulated advisers’ ethics in the context of post-retirement advice, I did not feel any anger, just relief.

I felt relief because I knew policymakers had these concerns but, up until that point, had not been prepared to say so. Instead, they justified many of their policies that discouraged people from seeking advice at retirement on fallacious cost grounds.

But while I did not feel personally slighted by Rookes’ opinion, it is hard to know that, still today, it is shared by a lot of consumers, many of whom have had terrible advice over the years.

Indeed, any anger I feel is reserved for those crooks and idiots who have fleeced consumers in the past, wrecking their lives and making it harder for good advisers to earn a living and help others.

So now is the time to work together with the guidance providers to help solve the problem that consumers at retirement face: “How can I find a good, trustworthy adviser to help me?”

Many advisers belong to one of the professional bodies which impose their own code of conduct on top of FCA rules. We need the advice profession to speak with a single voice to the MAS, The Pensions Advisory Service and Citizens Advice to establish a set of minimum standards at-retirement advisers will demonstrably meet.

I suggest they include the following areas: minimum professional qualifications; demonstrable experience of retirement advice; commitment to reasonable advice terms and conditions; independent sample audit of advice given; open publication of any complaints from past clients; and consequences for failure to meet standards.

I know there are many firms which would already meet these standards and be prepared to be transparent around it.

Many more will be prepared to join them if the guidance providers will commit to referring consumers to firms meeting these standards. In time, perhaps, such firms will be allowed to deliver front-line guidance, especially if there is a solid track record of delivering good outcomes for consumers.

Either way, the adviser community is going to have to pay its share of the levy to set up and run the guidance guarantee.

It, therefore, needs to come together with one voice, focused solely on helping the consumer at-retirement and show it can be trusted to play a key role.

What we must insist on from policymakers is honesty in the policy debate in this area and a proper willingness to work with us to help people make the right decision with these new pension freedoms.

Alan Higham is retirement director at Fidelity Worldwide Investment 

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Comments

There are 6 comments at the moment, we would love to hear your opinion too.

  1. Is that an advert for the PFS which already exists?

    Trouble is they do not feel their role is lobbying…

  2. I am considerably less sanguine than Alan about people who attack the integrity of my profession. Perhaps I have more pride in our profession than he does. There are a number of reason why policymakers don’t feel that advisers are trustworthy including one identified by Alan that of previous poor performance by some. The main one though is they fail to spot the fact that those consumers who use an adviser are generally very positive about their trustworthiness.

    Those who do not trust advisers are typically the ones who have not used them. So they must be adopting this lack of trust from somewhere. I suspect they get this attitude second or even third hand, perhaps from the media or even because they hear people (like the CEO of MAS) make ill-informed comments in public forum.

    Do we need MAS, TPAS and CAB to set a minimum standard of at retirement advice? Of course not, how silly is that suggestion?

    If an authorised and regulated adviser has a valid SPS and is therefore signed up to a professional body code of conduct and is carrying out CPD to maintain their technical competence why on earth would we want to subject ourselves to a pseudo-regulator telling us how to behave?

  3. Sorry am I missing something but did this guy actually read the RDR requirements the been a financial adviser or is this just some advert for a trade organisation as mentioned above from a few people.

    I really do take objection to the comment in this article:

    “I suggest they include the following areas: minimum professional qualifications; demonstrable experience of retirement advice; commitment to reasonable advice terms and conditions; independent sample audit of advice given; open publication of any complaints from past clients; and consequences for failure to meet standards.”

    Every financial adviser giving advice in today’s market should have a current SPS certificate and I suspect many others go well beyond what is mentioned above. The fact is MAS should have been working hand-in-hand with qualified advisers right from the start instead of moving in the opposite direction. Although Caroline Rookes is now moving in the right direction it is partly due to the fact that MPs are threatening to close the service down altogether and she is desperate to try and retain her job.

    I remind the FCA of its statutory requirement and therefore MAS:

    To secure an appropriate degree of protection for consumers.

    Will how can you do this when neither the FCA or MAS have a comprehensive list of registered financial advisers that is easy-to-use for the consumer without relying on third parties websites like unbiased.com where advisers have to pay for its use.

    Both organisations should be providing simple services like this as it is their statutory requirement to protect consumers.

    I would go even further to say that the current FCA register of financial advisers is not fit for purpose!!!!

  4. I agree with Nick Bamford and Peter Herd. Alan mistakes what advisers need with the hole the Politicians need advisers to dig them out of. One thing advisers have really learnt from RDR is to focus on their clients who pay the bills and leave the rest to the Politicians. Some of us warned the F-pack this would be the result of the changes they imposed, but they thought they knew best. Well stuff them.

  5. I agree with the above comments, Alan has missed the point.

    I believe that the vast majority of people who engage with a professional financial adviser value the experience and benefit from it. I do not believe, as an industry, financial advisers are doing things fundamentally wrong. Our priority is always providing the best advice to our clients in a way that allows our businesses to survive (and hopefully thrive).

    In all walks of life there are rogue traders that aim to rip off the public. The financial services suffers from the same blight but we, the vast majority, should not continue to be shut out in the cold by the powers that be – MAS, the FCA, government. There are plenty of dodgy builders around but would you ever see the government exclude home builders when considering the building of thousands of new homes?

    We do a good job, it is about time we were recognised for it!

  6. E L Wisty (an only twin) 19th December 2014 at 10:36 am

    Is this Alan Higham’s ‘Ratner’ moment?

    According to the article, he is retirement director at Fidelity Worldwide Investment and, therefore, presumably not a regulated adviser? Therefore, why does he feel that he has any business opining on Ms Rookes’ totally outrageous allegations against the advisory community? To add insult to injury, he is even trying to justify La Rookes’ comments.

    If I was cynical, I might think that his comments are designed to promote Fidelity’s interests with MAS, but then I’m just a cynical adviser.

    Mr Higham, you are right to point out that the advisory industry has suffered from more than its fair share of bad apples in the past, and that we are slowly metamorphosing into a profession. However, the sins of the past do not entitle you to condone Rookes’ badmouthing of us.

    If you wish to talk about this issue, from a third party perspective, I suggest that you focus on the need for Rookes to put her own house in order.

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