View more on these topics

Factoring ban most harmful to consumers, say IFAs

Advisers believe the RDR’s higher qualifications are most likely to benefit consumers, while the ban on provider factoring will be the most harmful, according to Aegon’s latest IFA Insights survey.

A third of respondents say higher minimum qualification requirements will be most beneficial to consumers, 29 per cent say greater clarity of services and 9 per cent say retention of the basic advice regime is key.

Factoring topped the most harmful list with 31 per cent of votes, followed by 29 per cent who say adviser charging will be damaging and 15 per cent for the simplified advice process.

Aegon says it is surprised that adviser charging received such a high proportion of votes and believes this could be due to the associated factoring ban.

Aegon adds that it hopes the FSA will reconsider its decision for an outright provider factoring ban and work with the industry to come up with a practical solution.

Aegon head of business regulation Steven Cameron says: “IFAs are clearly concerned about the proposed ban on provider factoring. While the FSA believes this is necessary to eliminate any bias and improve consumer trust and confidence, IFAs see this as the proposal most likely to harm consumers.

“Aegon shares this concern. We need to make sure the focus on removing bias doesn’t come at the expense of driving advice out of the reach of modest regular savers.”

Recommended

3

Alan Lakey quits IFA Defence Union

IFA Defence Union chairman Alan Lakey has resigned from his post, saying a power struggle with founder and former chairman Evan Owen prevented him from making necessary changes within the group.

Get to core in schools

Matt Morris (The Knowledge Gap, Money Marketing, September 17) suggests no one seems to know what the current policy on personal finance education is.

Life cover for life

Jennifer Gilchrist Proposition Lead – Design, Royal London When someone mentions whole of life plans, most people will think of a niche product that serves as an inheritance tax planning tool for high-net-worth clients. And it’s really not surprising they’ve been pigeonholed in that way because before the arrival of RDR in 2013, that’s more […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There is one comment at the moment, we would love to hear your opinion too.

  1. Factoring ban most harmful to consumers, say IFAs
    Of course higher qualifications will in theory be beneficial to consumers ~ IF the material to be studied is actually likely ever to be called upon in practice. Much of it will not be. The reality is that thousands upon thousands of IFA’s will find the challenge of having to learn all sorts of stuff outside the realms of what they actually do from day to day that many of them will quit the industry and leave their clients of long standing to the mercies of……..who? Fee charging CFP’s? The banks? The providers? Will that be a step forward for consumer interests? I hardly think so. As for the proposed factoring ban, this isn’t as big an issue as many people are making it out to be. We switched to non-indemnity commissions eight years ago and have never looked back, so this aspect of the RDR doesn’t bother us at all. It’s just a matter of weaning yourself off upfront commissions for selling products, which may not be easy if you live by what you sell, but it can be done.

Leave a comment