As a small IFA who feels that the FSA continues to target small firms unfairly while paying lip service to the banks, it is interesting to note that the final notice sent to Barclays on January 14 by the FSA makes no reference to commission, sales targets, sales incentives, etc.
At a time when advisers are being forced by the RDR to charge fees rather than take commission, surely the FSA should have investigated what commission was payable by Aviva, how Barclays’ advisers were remunerated and whether branch staff were incentivised to hit sales targets.
Point 4.3 of the final notice confirms that Barclays Financial Planning operates on a multi-tied basis. It would be interesting to learn what other alternative products to the two Aviva funds were available. If alternatives were available, did they pay the same commission as Aviva?
If the FSA seriously believes that commission is a factor in misselling, surely these points are relevant.
As a business owner, I firmly believe that the only advisers/salespeople who are entitled to take commission are businessowners. Salespeople working as employees of IFA firms, banks and other institutions should be paid a good salary. They should not be under pressure to hit sales targets to earn a decent income.
Chartered financial planner
Reaction to online story headlined, FSA fines Barclays £7.7m for advice failings
How many of the sales were down to advisers on targets which were then chased down by sales managers, regional managers, area managers and by the “bosses”? At least the FSA recognises that it was down to “sales staff” and not advisers, which just about sums it up. Are we finally getting somewhere?
Unfortunately, fining banks does no good as they can cover the cost from other operations. A similar level of fine would close an IFA practice. Until they start removing their permissions to give “financial advice” there is no incentive.
Where does the buck stop? If I had approved these sales, I do not doubt that my 15-year-old IFA practice would be closed down. That is why small, directly authorised firms pose little or no risk to the investing public. Someone at Barclays was responsible for this shoddy debacle. Follow the audit trail.