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FSA will choose costlier and more confusing route

Reading about Nick Bamford’s ire over the way in which Barclays are representing the financial services they can provide to their customers, I feel entitled to point out that this is exactly what I predicted several months ago whenDavid Severn was spouting on about how great depolarisation was going to be for the industry and its consumers (we knew it was baloney then and now we know it even more).

It was obvious right from the start that this is what those who chose to multi-tie would do – we have picked the best provider in each particular product category so why do you need anything more (like a whole-of-market adviser)?

Given that all this mess is the fault of the FSA (as usual), one has to ask why it cannot see that its resources could be spent on better things than leaflets that might well be entitled: “So your low-cost endowment looks like it might come up short (thanks to us). Well, here’s how to go about screwing your financial adviser.” Or all these stupid IDDs that nobody reads or understands or would care about if they did.

How about an FSA leaflet that all advisers of all persuasions would be required to present to all prospective clients at their first meeting explaining exactly their status and what that means in terms of the advisory services they can offer the prospective client?1: My firm is a tied agent of XYZ Life and I am able there-fore to advise you solely on that company’s products and those of no other.2: My firm is a tied agent of XYZ Life, ABC Life, PQR Life and JKL Life and I am able therefore to advise you solely on those companies’ products and those of no other.3: My firm is fully independent and I am able therefore to advise you on all and any of the products of all the companies that make up the marketplace, irrespective of whether or not I would recommend a particular company or one of its products as a good place to which, in my opinion, you should commit your money.

As a consumer, which of those three options would you consider represents the likely best source of advice?

But, of course, such an arrangement would, for the FSA, be too simple, straight-forward, positive and cost-effective. If there is a costlier, messier and more confusing way to do it, then you can bet good money that that will be the very one chosen by FSA. Desperate, isn’t it?

Julian Stevens WDS,Bristol


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