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Exams test the limits of common sense

RDR

Referring to Matt Timmins’ excellent comments on grandfathering, I would like to add to the debate. Two years ago, Nick Bamford and I were exchanging our opposite views via this page. Nick is completely against grandfathering whereas, given certain circumstances, I am for it. There are a series of alternative assessments available that would cost less and provide better evidence of competency than any exam ever could.
If the adviser has been known to the FSA for years and has proven to be totally competent, why do we need another piece of paper on the wall?

Surely, an efficient regulator would have got rid of those unsuitable to practise long before now.

I have always taken the view that if the regulator’s agenda is to get rid of the old advisers, exams would be a perfect way to achieve this aim. Being able to tick all the right boxes is one thing but putting up with undue stress that the examination scenario inevitably generates is quite another.

The Tory MP Mark Garnier is spot on, he can see how this is going to go if the problem is not fixed. The end of 2012 will see hundreds of IFAs calling it a day or falling off the cliff edge, as Tim explained it. Where will their orphaned clients turn to for advice? Hello, high-street bank, we know you have done a wonderful job so here is another cash cow.

I hope that common sense will prevail. It would be a travesty if millions of clients were driven away from IFAs who have proved trustworthy over many years to other sources of advice, many of whom have badly let down this country through greed, if you get the drift. I would be inter-ested to hear views on both sides of the argument, from IFAs and the regulators. Some of the latter are, I believe, against the RDR in this particular aspect.

Barry Johnson
Barry Johnson Financial Services

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. Barry – I agree with you. For me, it is not the RDR which is the problem, it is the RDIP.
    The RDR is the long term plan, which many of us (although not all and I accept others right to debate that) believe the long term plans of the RDR will be good for the consumer.
    The RDIP is the timeline, which when combined with average ages of IFAs, lack of new entrants, consumers lack of awareness and many other issues means in the short term the RDR will be damagaing to consumers and a good number of honest hardworking advisers, especially those who otherwise would have retired with grace in a matter of a few years time. In the medium term, it could go eitehr way, but is that a risk worth taking as it is very difficult to build from scratch what has been caste aside without thought (as the American administrations decision to disband and then start from scratch the Iraqi Army just goes to prove)
    It is the impossition of this deadline which I find so objectionable and contrary to the FSAs original claims that the RDR would be industry led when it is being led by certian parts of the industry with no democratic mandate either at the adviser level or at the government level. That to me is an Oligarchy and NOT a democracy and if RDIP is forced through by an Oligarchy, I probably will not be staying post RDIP )good riddance some might say) despite already adviser charging, on my way to my DIP and being only 45 now (and 47 when RDIP is being forced through)

  2. Your hope that common sense will prevail, Barry, is a worthy aspiration but, in light of the FSA’s track record to date in matters of common sense and its unwillingness to negotiate on well-reasoned representations from various industry bodies, it’s hard to be optimistic. The FSA sets its own agenda and anyone or any body who dares to stand in its way can either be trampled underfoot like some tiresome and inconsequential insect or go jump off a cliff.

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