View more on these topics

All quiet on the independence front

So, N2 and the end of the old Financial Services Act regime is almost upon us.

Somehow, I do not think we will be remembering where we were on that epoc-hal day like some of us can remember where we were when Kennedy was shot.

But it is a significant date for all that and one which has not been reached without the odd alarum and excursion. Indeed, despite the avowed intention that there would be a seamless transition from one regime to another, the grandfathering process has not exactly been glitch-free. Following our intervention, it now seems the recovery from the glitches will at least involve only the regulator in more work and will not mean that IFAs have anything extra to do.

All that now has to be made sense of is the controlled function lists which have been written in a peculiar form of English intelligible only to the legally qualified. I trust that this is not an omen of things to come.

I certainly hope that N2 gives the IFA community a chance of less restricting, less intrusive regulation.

Certainly, we will be suggesting where the consolidated rulebook needs streamlining in the interests of getting advice to those who need it and we will be looking for evidence that the more positive noises coming out of the regulator about the style of regulation (which we ought to welcome) are being translated into action on the ground.

My main concern is whether the FSA – with its unwieldy range of responsibilities – will be able to show flexibility and speed across the ground without becoming bogged down in the convoluted process required by the statute.

The regulator should be able to help businesses understand what regulation means for them and not have a three-month consultation before that happens.

I continue to see evidence from all the various research studies which are being published that consumers like the idea of independent advice and that they know in particular that it means greater choice for them.

But there is one finding which really puzzles me. There has been research undertaken by IFAP and Aifa working through Adv-ice First into how firms describe themselves to consumers.

I thought I knew what the study would find – plucky IFAs proclaiming their independence from the rooftops at the slightest provocation and, yes, I did intend to use those findings in arguing the case for polarisation.

But I learned yet again never to predict the outcome of research. In the words of Private Eye, “Shurely shome mishtake”. Three times as many of the surveyed tied agents told the enquirer up front of their status, as did IFAs.

If you ring an IFA with a preliminary enquiry, in just under one in 10 inst-ances will you end the phone call knowing that you were getting advice from an independent who can select from across the market and who acts in your interest not in the interests of any provider (two factors of especial interest to the consumer)? Of course, I am sure that this is made clear at a subsequent meeting but is that early enough?

Consumers seem to be really attracted by independence. In another survey, over three-quarters said that they wanted advice which was independent of a bank or insurance company.

So, does this make it a unique selling proposition which should be communicated in the first nano-second of contact?

I realise that I am some way away from the coalface and my perspective may be different from yours so please let me know why my original guess was wrong.

Recommended

VCTs urged to open up on NAVs and holdings

Venture capital trust pundit Martin Churchill is calling on VCT managers to standardise their performance reporting in a bid to boost clarity across the sector.Churchill, who runs the IFA information service Tax Efficient Review, says current performance reporting is erratic and often as infrequent as bi-annual.He would like to see VCT managers produce regular reporting […]

Special effects

Introduced business from neighbouring professions has long been part of IFA practice but increasingly it is IFAs referring business to each other, seeking out fellow IFAs with expertise in a particular area.In discussions about the future direction of IFA businesses, two comparisons are often made. In terms of professionalisation, the analogy is made with accountants […]

UCB Home Loans – 3 Year Fixed

Tuesday, November 13, 2001.Type: Fixed rate self-certification mortgage.Fixed term: Three years.Fixed rate: 5.85 per cent.Minimum loan: £25,000.Maximum loan: Loans of up to 50 per cent of valuation subject to amaximum of £750,000, 51-70 per cent subject to a maximum of£500,000, 71-80 per cent subject to a maximum of £300,000, 81-85per cent subject to a maximum […]

Public are backing Polarisation

IFAs have had a ringing endorsement from people who buy financial products, with 89 per cent saying they know what the term independent means, according to research by Aifa and IFA Promotion.The survey reveals over 60 per cent of consumers would choose an IFA over tied agents.Aifa says this response from 500 consumers shows “clarity […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    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

    Email: customerservices@moneymarketing.com