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Dennis Hall: Advisers paying for guidance is highway robbery


In 2006 I started my business using my own savings. For several years I didn’t take any drawings until I had made sufficient profit. I charged fees in exchange for knowledge and time. We dealt only with people prepared to pay us, and took no money from providers or anyone else. The only people contributing to our bottom line were fee-paying clients.

And yet, all anyone else has ever done is take.

Which is why I am vehemently opposed to Chancellor George Osborne’s free pension guidance. It isn’t free to me, and by extension it isn’t free to my clients. I am also opposed to the FCA’s view that firms like mine should pay any share (let alone the lion’s share) of the costs of providing guidance. 

Why? Because the people who will use the service have never contributed to my bottom line, paid my staff, or funded my client’s advice, and they never will.  It is the same thing with the Money Advice Service.  I am in business to serve my clients and make a profit. I am not a charity and I am not Robin Hood taking from the rich and giving to the poor.

Every time government or the regulator decides they want the industry to fund their latest project I suffer, as do my clients and staff, because there is less money in the kitty. This seemingly bottomless pit of money from which they continually draw is running dry. Forget Robin Hood, they are more Dick Turpin – it’s highway robbery.

If Osborne believes strongly that everyone should have access to guidance, then everyone should pay for it through taxation, in the same way we pay for other things that benefit everyone, like healthcare and education. Singling out the financial services sector is grossly unfair. If we are supposedly “all in this together” (and I bet they wished they hadn’t said that) then prove it, because right now every Tom, Dick and Harriett will be dipping into my bank account to help pay for their free guidance. And that is wrong.

Dennis Hall is managing director at Yellowtail Financial Planning


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There are 7 comments at the moment, we would love to hear your opinion too.

  1. It’s basically another tax which because of its extraordinary powers, the government via the regulator can impose without any fear of effective opposition.

    I would be interested to see the government imposing a legal guidance levy on lawyers or a medical guidance levy on GPs!

  2. Dennis lets face it this is purely a political agenda to win votes.

    Unfortunately the majority of the country thinks that anyone working in financial services drives a big flash car and is dishonest (driven by the huge bonuses at investment banks) when nothing could be further from the the truth.

    Alas it is too easy for politicians to score political points using financial services as the whipping boy. After all it was those bad people in financial services that forced individuals to take out mortgages they couldn’t afford (a government strategy to increase home ownership), it was those bad people in financial services that developed low cost/low start endowments to help with purchase of homes on interest only mortgages (part of the above strategy and having to use assumed growth rates set down by the regulator), and it was those bad people in financial services that encouraged people to transfer out of occupational pension schemes (remember the government run adverts with a ball and chain anyone?).

    I thought that I had voted for a Tory government when it appears to be one that is introducing socialist ideas at the expense of the private sector.

  3. As I said elsewhere it’s pretty rich that HMG objected to the “Robin Hood” tax for the very relevant reason that the little guy in the street would end up paying it though his/her pension savings, and then to turn round and do exactly the very same thing to the little guy who pays for financial advice.

  4. Peter Blackburn 28th July 2014 at 10:36 am

    I totally agree with the sentiment expressed here. However, without some form of combined representation at this level, I expect our concerns will not be heard.

    I have responded to the questions raised in CP14/11 and you can also do this too if you wish here –

    However, I feel that we do need a unified voice to put forward the interests of our profession and without it, our individual concerns will most likely not have the same weight as they could do when presented collectively .

  5. Mark Hutchinson 28th July 2014 at 1:57 pm

    Hi Dennis / Peter,
    The Personal Finance Society will be responding to the consultation more broadly but we do oppose the suggestion that advisers, or indeed insurers, should contribute any more money to the running costs of the Guidance Guarantee service. There are a number of reasons to support this view, but the most obvious is that Advisers already pay a share of the £81.1 million Money Advice Service budget, which in our view needs to be reallocated to fund the guidance service. Any additional funding could be sourced from the regulatory fines pot which currently goes straight to the Treasury.

    By comparison, TPAS has a more modest annual budget of £3.3m which is made up primarily from a grant-in-aid received from the DWP and it seems perfectly reasonable that funding via DWP should continue, or reallocate some of the £81.1m MAS budget to TPAS. It is no surprise that both MAS and TPAS will be the main ‘go to’ points for guidance and therefore the more meaningful reallocation of their combined £84.5m budget to deliver the service would be a better use of resources.

    It should be recognised that the FCA are seeking views on their provisional proposals and in fairness there is some logic to using the existing FCA ‘A’ fee-block framework for collecting the levy to fund the guidance. Advisers that don’t agree should respond to the consultation stating their reasons and, more importantly, offer an alternative solution.

    Keith Richards, Chief Executive of the Personal Finance Society

  6. Peter Blackburn 28th July 2014 at 3:16 pm

    Dear Keith

    Thank you for your response.

    I look forward to reading the Personal Finance Society’s view on this matter once formulated and in particular how this supports the interests of it’s members.


    Peter Blackburn

  7. The FCA is merely facilitating this on behalf of the Treasury

    Freedom and choice in pensions Government response to the consultation July 2014 Cm 8901 page 19 summary panel final bullet point

    “the government will legislate to establish a levy on regulated financial services firms to fund the cost of the guidance service”

    I think our objections to the proposed levy should be aimed at the Treasury not the FCA

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