Apfa has dismissed Government plans to impose fiduciary duties on investment advisers as “vacuous” and says it is unlikely to have an impact on advisers.
Speaking at the National Association on Pension Funds corporate governance conference last week, business secretary Vince Cable set out the Government’s response to economist John Kay’s review into long-term decision-making in business, published in July.
It will seek to define fiduciary duties for all investment intermediaries including advisers, brokers and trustees by ordering reviews from the Law Commission and Financial Conduct Authority.
The FCA will consider whether its regulatory rules and approach support these standards and the Government will seek to change EU rules where necessary.
The Law Commission will review the legal obligations on investment intermediaries seeking to act in their clients’ best interests and report back as soon as it can. Law commissioner David Hertzell, leading the report, says it has yet to agree any timescale or terms of reference with the Government.
Apfa policy director Chris Hannant slammed the report as “vacuous” and says advisers already have duties towards clients so it will have little impact.
He says: “It is hard to identify anything of substance. There is some waffly stuff about codes and warm words about the way intermediaries should be behave by acting in the client’s best interest and in good faith but I don’t think it adds anything to what advisers currently do. The Government is asking for a lot more work to be done so it’s all being kicked into the long grass.”
Chartered Insurance Institute director of policy and public affairs David Thomson says: “It is important that any reviews undertaken by the Law Commission and the FCA do not try to re-invent the wheel in attempting to promote long-termism.”