View more on these topics

Floggers will not find a safe haven with banks

I agree with Brett Davidson of FP Advance that IFAs at the product-flogging end of the market who are unwilling to move to a fee basis will, sooner or later, be forced out of their present positions.

As in so many other walks of life, the climate in financial services is changing and in certain key areas for the better despite the FSA’s endless succession of cack-handed initiatives. Those who cannot evolve and adapt will either starve or have to find another line of work.

However, the prospect of such people finding a haven with the banks is very much less likely, not least because the FSA seems at long last to be focusing attention on the way in which bank advisers charge for their services. Personally, I think all this talk about the banks moving away from commission is little more than hot air to give a passing semblance of levelling the playing field.

Barclays may well be crowing about how big a slice of the IFA market they aim to grab but the crux of the issue is that most of the banks seem only to be capable of giving advice (flog-ging products) on the basis of maximum commission.

Bank salespeople will find that arranging a £100,000 investment bond and billing the client for three or maybe four hours work at, say, £150 an hour is a radically different proposition from taking their usual 7 per cent commission. It simply will not happen.

And as for long-term servicing, monitoring and reviewing of their clients’ affairs, the banks must surely have a very steep mountain to climb that will eat further into their profit margins.

Julian Stevens
Partner
Harvest IFM
Bristol

Recommended

EuroCape offers second bite of the cherry

EuroCape has teamed up with Acorn Corporate Finance for EuroCape Property Finance II, an exempt unit trust investing in secured bridging and development finance for property projects in the UK, Europe and South Africa. The fund is also available as a limited partnership.

Franchisee claims unpaid commission in court clash

A former Ashley Law adviser who claims he is still owed money in unpaid commission by the company finally took his battle to court last week.Chris Wilson alleges the company was in breach of contract and is seeking to recoup preand post-termination commission he believes he is entitled to.Mr Wilson bought the franchise for Ashley […]

More clients want to go the third way

IFAs say client interest in flexible retirement products is growing faster than for conventional annuities.MetLife research shows that 87 per cent of IFAs have seen rising demand for third-way products, with 70 per cent reporting that the increase in demand has been strong.But IFAs reveal worrying levels of understanding among clients in relation to their […]

Life Trust raises £25m for longevity products

Life Trust says it has raised £25 million of capital which it will be using to launch a range of products to meet the needs of increasing longevity.The funding is provided by JP Morgan, Royal Bank of Scotland and the D.E. Shaw group. Life Trust intends to launch its first product later this year, following […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com