View more on these topics

Call on clients to campaign for commission

There has been much vitriolic comment and angry reaction from IFAs (including myself) in response to the FSA&#39s ill-advised proposals regarding IFA commission and the changes to polarisation. With the exception of a few fee-based IFAs, who have my respect, most of the IFAs and industry commentators I have spoken to seem to be singing from the same hymn sheet on the commission issue.

Now that we have all vented our spleens to the trade press, I suggest that, for once, instead of just moaning to each other and anyone else who will listen, we all get together as a united force within our industry and make our voices and those of our clients heard.

It is imperative that we all make our views known to the FSA between now and April 19 when the “consultation period” ends. I have already written to the Chancellor of the Exchequer and I will shortly be writing to the FSA to make my views known.

More important, though, I am going to write to all my clients and explain what the effects of the FSA&#39s proposals will mean to them. For instance:

1. If they want me to continue to provide them and their families with independent financial advice, they will have to pay me up-front fees for my services because I will no longer be able to receive commission when we conduct business together.

2. In future, as my time will be money, if they want some generic advice about Fred&#39s company pension scheme, Sharon&#39s cash mini Isa or granny&#39s National Savings Pensioner&#39s Bond, it will no longer be a free chat over coffee and biscuits. They will all get a bill for my time.

3. There will be no more free annual reviews to keep a check on their progress or the state of their investment portfolio. There will be a bill for my time every time I go out to see them.

4. There will be fewer home visits in the evening. As travelling will use up my valuable time, more of my client meetings will have to be conducted at our offices during business hours.

5. For those clients who only occasionally do business with me, I will start charging a retainer fee each year in order to make our relationship commercially viable.

6. There will be no more free quarterly newsletters or Budget updates. I will have to charge for this service in future.

7. When they ask me to pop round on my way home to help them fill in their tax return, they will receive a bill for my time.

I am also going to tell my clients that if they do not like the above options and would prefer for me to continue to be paid on a commission basis, they can do something about it. I will encourage them all to write to their MP and directly to the FSA to state that:

1. They have always been happy with the financial advice I have provided.

2. They are happy for me to receive commission for the policies I have arranged and will continue to arrange for them in the future.

3. They want to continue to receive impartial and independent advice from me.

4. They do not want to have to pay me fees for that advice.

I will even offer to provide them with a draft wording for such a letter which will be available upon request by post or email.

I like to think that I have a very strong relationship with my clients and that many are now friends. I guess this issue will test just how strong those relationships and friendships really are. It is a gamble I am prepared to take and I urge every other IFA who does not want to see the end of commission payments to carry out a similar exercise as soon as possible.

The FSA has obviously chosen to ignore the views of Cap Gemini Ernst & Young, the Consumers Association, Aifa and all the industry figures and IFAs who have been brave enough to stand up and air their views.

However, it will not be able to ignore the views of thousands of IFA clients from all over Britain.

So, if you do not want the FSA to completely screw up your business and our industry, please do not waste time and energy talking about this issue to each other. Talk to your clients and ask for their help. Get them to write to their MP, the FSA, the Chancellor, the Prime Minister and anyone else who can make a difference.

Stop whingeing and take positive action now before it is too late for all of us.

Nick Plumb

Senior IFA,Legacies Asset Management,

Brentwood, Essex

Recommended

Invitation to Davies

I recently sent the following letter to Sir Howard Davies and thought you might be interested in my invitation. I wonder if Sir Howard will take up my offer?“Dear Sir Howard. As a partner in a small town practice of independent financial advisers, I am writing to extend an invitation for you to spend a […]

Guaranteed bonds &#39not living up to name&#39

Guaranteed bonds that aim to protect investors from fluctuating stockmarkets do not always live up to their name, according to the latest issue of Money Marketing Focus Survey. The survey found these guaranteed or structured bonds often pay out less than was invested, while others only just manage to return the original capital. Many have […]

&#39FSA is not coercing IFAs&#39

“Polarisation is dead. Long live independent advice!” might well be the rallying cry for some IFAs once they have studied for themselves the FSA&#39s proposals for reforming polarisation.As companions to the consultation paper, we have published three research reports. They cover the consumer research, the extent of commission bias and the process by which IFAs […]

Independent view

In January 1962, I entered Commercial Union&#39s head office to begin a career in financial services. Forty years later, I look back on five decades of change and challenge.1960s. Started in the claims department, witnessing that – for pennies – families and businesses can be held together, children educated, mortgages paid, retirement income provided and […]

Reforming India: just the beginning

By Kunal Desai, Neptune India Fund

As global investors continue to scour emerging markets through the lens of reform potential, India shines bright. Indeed, we think it can sparkle even brighter. We anticipate India’s self-imposed 10-year ‘policy holiday’ to turn into one of the most pro-growth and pro-investment policy calendars seen in Asia in years. The Indian electorate has engineered a historic verdict. We now have the strongest Indian government since 1984, with the pro-market Bharatiya Janata Party (BJP) achieving an absolute majority for the first time in the party’s history.

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