Round Table requires the recitation of its aims and objects at every formal meeting. People can remember them as they are short and to the point and those are the very same qualities required in any code of ethics.
You also need to provide examples of how these principles will work in a series of scenarios to give weight to their reach and depth.
The launch of the revised ethics code by the CII provides an excellent example of a code of ethics and the CII is committed to promoting this code to the public through the medium of its members.
The regulator needs to recognise that others may have the answer. As we saw in the banking debacle, thinking you know the answers can be expensive for all of us.
Ethics are an essential part of being a professional but you need more than a one-off course to ensure they are truly put into practice. At university, an ethics course tends to be short and infrequent. Indeed, it is almost like sex education at school – poorly presented and perfunctory in every way.
Brevity is the key. The model code in the RDR needs serious editing if it is to have any effect. Codes need to be easily translated for the public so they know what to expect. If they don’t, then they are window dressing, nothing more, nothing less.
It would be wrong if I did not address the statistics relied upon in the FSA RDR implementation plan paper. More recently, the regulator seems to be distancing itself from the survey as they recognise its frailty.
The report has an inad-equate sample of respondents and those being questioned have little idea of the topics posed by the questions from the researchers. To put it simply, asking IFAs who don’t charge fees questions about transition costs is equivalent to asking non-economists about their prediction for RPI over the next 10 years.
I am very concerned that the firms which are yet to move to fees have no idea how to get there and, worse still, many cannot afford to cope with the change in cashflow. Nor are they in the position to document their processes. When so many RIs are self-emp-loyed, trying to get them to operate in a common style is a major issue.
For me, this is a case of deja vu compared with the pension misselling review. At that time, IFAs needed project management skills and that point was comp-letely missed by the regul-ator. Now we need the same type of help. Perhaps the most economic way would be applying for ISO 22222, given the grants that are currently possible.
Practical help is what is required. It is not enough for people to say why fees are the way forward without giving practical guidance. Whichever method is selec-ted for transition, no one should underestimate the time commitment needed. All this and exams too.
Round Table remains the best membership body for those under 45 seeking to make their mark in the community. Its motto of adapt, adopt and improve is an excellent approach for those changing their business model.
We need the same sense of community in our sector. Now is the time to visit other firms to find out how others operate. Perhaps some form of project could be set up to determine if this is truly possible.