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Davy dismisses irrelevant GFA

Simply Biz believes the general financial adviser category proposed in the retail distribution review will become irrelevant if the top and bottom tiers are structured correctly.

In his latest paper on the RDR, Simply Biz chairman Ken Davy says that most IFAs should fall into the professional category but says it is necessary for this to include a transition period. This is to ensure that all advisers either meeting a minimum requirement of diploma standard or ISO22222, which is below chartered but higher than the current minimum requirement of FPC.

He says: “We believe it is completely illogical and counter-productive for the FSA to deny existing advisers the right to continue to advise their clients simply because they have not passed a particular exam.”

Davy says he does not see customer-agreed remuneration as a threat. He says commission has been disclosed to the client pre-sale and post-sale since 1991.

He says: “During that 16 years, our market share has moved from less than 30 per cent to well over 60 per cent so we do not see customer-agreed remuneration as a threat.” Davy believes the debate over commission versus fees could be removed as long as CAR is implemented as proposed in the RDR.

He says: “What this makes clear is that an adviser can agree with the client that their remuneration can be paid by the provider rather than the client having to write out a cheque. This should eliminate once and for all the sterile debate about commission or fees as everything will simply be treated as remuneration.”

Simply Biz also believes primary or basic advice, will not work and that any move to limit regulation in this area should include restricted access to the Financial Ombudsman Service.


Investment trusts win VAT exemption

The Association of Investment Companies has won its 10-year battle with HM Revenue & Customs for investment trusts to be exempt from VAT on management charges.It says the victory could save the industry £40m a year and is calling on HMRC to repay £300m of VAT paid in the past.HMRC withdrew from the AIC’s appeal […]

Miffed over Mifid

One week after the arrival of the mighty Mifid, I ask you how much of your business has changed? Mifid is one of the most important European regulatory changes in as long as I can remember. For any of you who remain blissfully unaware of the arrival of this huge European directive, let me update you.

Northern Rock’s borrowing from Bank of England slows significantly

Northern Rock’s emergency borrowing from the Bank of England has decreased significantly to just £500m in the last week.The BoE published figures showing its balance sheet had expanded by just £500m in the last week to November 7.Previous weekly amounts borrowed by Northern Rock have been around the £2-4 billion mark so this week’s rise […]


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