View more on these topics

FSA not listening to IFAs&#39 views

Having read a good deal of the of debate on CP121, it is beginning to emerge that CP121 is very much less a consultation paper than a declaration of intent.

The one thing emerging above all others is that the FSA is emphatically not an open-minded or listening regulator (despite its claims to be).

It has its own particular agenda for change (flimsily disguised as “reform”) and uses all manner of disingenuity to cast aside any argument that its plans, when implemented, will muddy the waters for consumers and play into the hands of the banks and building societies.

The FSA seems utterly determined not to accept, much less understand, the industry&#39s established thinking on the clarity for consumers of polarisation or the practicality and desirability of giving consumers a choice of how to pay for the advice they receive.

I am all in favour of those who purport to be advisers being encouraged to give advice, rather than simply justifying sales of products.

This is the direction in which I am making every reasonable effort to steer our particular practice. Our modus operandi has, over the past year, evolved towards charging a combination of up-front fees (for our initial report and recommendations) and commission (often at discounted rates) in respect of whatever transactions may result. Both are fully disclosed to our clients before they proceed.

The commission element is variable, of course, as the client may change his mind as to just how much he wishes to spend on or invest in the product. This will rather upset the workability of commission within a defined level of remuneration, will it not?

Why, if the consumer is happy with such a system, does the FSA have to meddle with it? It will not say, at least not in terms that any reasonable person can understand.

Shortly after taking office, Alastair Darling said, “If it is not broken then we will not be aiming to try to fix it.” Polarisation does not need fixing.

Less than a year ago he declared, “Polarisation is past its sell-by date”. Polarisation never had a sell-by date – it is as right now as it ever was and does not need people like Mr Darling tearing it all down.

As for David Severn, here we have a grey, humourless and Machiavellian bureaucrat who could not give a straight answer to a straight question if his life depended on it.

Presently, my thinking is that we shall probably take the AFA route but continue to describe ourselves to our clients in everything but our terms of business document as independent.

If a client should ask why the word independent no longer appears in any of our literature, we shall simply say that it is because a certain group of narrow-minded and bigoted people controlling the industry have decreed that the term shall be used no more by anyone other than those who charge fees, albeit that commission may form (a quite possibly variable) part of an overall defined-payment structure.

The cost to IFAs of dealing with one of these new defined-payment structures may also need to be varied to meet the additional, yet unpredictable, costs of resolving the more-or-less inevitable delays and errors which occur in getting just about any transaction with most life offices to a satisfactory conclusion.

Like so many other things, this is something that the FSA does not seem to have thought about. Yet the FSA, in its omnipotence, remains perfectly free to ratchet up its levies by however much it pleases whenever it considers it necessary.

Is this democracy or what? Do as we say, not as we do (especially in matters of honesty and competence).

Julian Stevens

WDS Independent Financial Advisers,Bristol


Liontrust screens stocks to beat index

Liontrust Asset Management is looking to bridge the gap between passive and active fund management with an innovative quantitative-screened index fund.Indextra will track the FTSE 100 index, omitting any stocks which fail either of two quantitative tests.The first screen tracks rolling three-month earnings&#39 forecasts from a range of analysts, taking note of whether a stock […]

Dresdner goes through a phase

DRESDNER RCM GILT TO EQUITY ISA Type: Unit trust and Oeic maxi Isa Aim: Income and growth by investing initially in the gilt yield trust, and then in the UK equity fund or UK equity income trust Minimum investment: £7,000 Maximum investment: £7,000 Catmarked: No Investment choice: Gilt yield trust and then choice of UK […]

Positive Solutions plans growth and AFA switch

Positive Solutions has signalled that it will cease to be an IFA and become an auth-orised financial adviser.The firm, which increased its RIs to 455 in 2001 from 227 the previous year, is planning further growth by targeting advisers in national IFAs.Chief executive David Harrison told the AGM that Positive Solutions might brand its advice […]

Cherie Booth off annuity case

Cherie Booth QC, wife of the Prime Minister, is no longer acting on behalf of pensioner Joe Singer in his challenge to the requirement to buy an annuity at age 75. Manchester based solicitors Latimer Lee acting on behalf of Mr Singer refused to comment as to why Ms Booth is not being retained or […]

Investment Forum

Position Portfolios for a Changing China, Accelerating Disruption and More Political Discourse Is China an asset class? Why Investors’ Understanding of China is Changing How is disruption changing the way we invest? Established Ways of Doing Business Are Being Challenged What to Watch: Why politics matters more than ever in 2017 Key takeaways: Despite volatile […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    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