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So the FSA is advertising for a new chairman to replace Sir Callum McCarthy who,I believe, never intended to seek a second term so, in all fairness, we can say , his decision is nothing to do with the Northern Rock debacle with which his term as chairman of the FSA will forever be associated.

However, he has left us with the ticking timebomb of the retail distribution review and only time will tell how much of a disaster this will be if we see the re-emergence of tied salesforces.

Primary advice is a recipe for disaster. We will be putting these sales in the very hands of the organisations that were responsible for some past scandals and the ripple effect of those applyto us all.

Somehow, the FSA has been persuaded that leopards can change their spots and it will all be all right if they arejust allowed to transactonly simple products.

But there is an inherent risk in the way that these salesforces will be remunerated.I believe that to allow these salesforces to be remuner-ated by commission will lead to the very thing that the FSA accuses IFAs of doing. This is a built-in contradiction inthe RDR’s view of the world.

Back to Sir Callum, he reminds me of a friend of mine who would sit at dinner and start off a controversial conversation in which everybody would get intensively caught up. To keep it going, he would lob in few controversial comment grenades then withdraw and letthe mayhem ensue.

Sir Callum, have a happy retirement while the rest of us try to deal with the mess that you have left us.

The catchphrase that the industry model is broken isa piece of tosh. The model is broken for some people due to their Luddite refusal to move with the times.

As I have said in the past,I accept some of the conclusions of the RDR but I believe that it should be the choiceof the client as to howan adviser, professional, general or primary, is paid.

The client should be asked to agree the remuneration of all forms of advice. It should be one system for all, whether it is factory gate pricingor commission.

Where does that leavethe current crop of finan-cial advisers?

I think it leaves us ina world where in the next three to four years we will all be taking exams of one sort or another. By my calculation, most financial advisers will have to take at least three exams to be at diploma level. Then, if they want to be chartered status, another four exams, which, I am told by my training and compliance supervisor, will be at least six months per exam.

I was recently in a meeting in a room of 400 financial advisers and only around2 per cent were chartered. The rest were studying for exams for diploma level.

The RDR’s view that, in order to be the equivalentof an independent financial adviser, an adviser shouldbe chartered is raising thebar of qualification too high. The time that it wouldtake for a currently FPC-qualified adviser to reach chartered status is too long.

I believe a general adviser should be at the very least diploma-qualified and there should be a limit on the type of business this type of adviser can transact. This type of adviser should be limited to individual client business, or corporate clients withno more than five indiv-iduals in a company.

Chartered professional advisers would then have permission to deal with all types of business. My beliefis that to deal with individual and small corporates, advisers do not need any specialised knowledge that would not be adequately provided by the diploma study syllabus.

In that way, we would have a two-tier industry, as with the legal profession. General advisers would then refer more specialised businesson to chartered professional advisers while dealing with the day-to-day general stuff. However, I believe some way must be found to give current independent advisers credit towards the diploma bythe length of time they have already spent in the industry.

John Winful is a partnerat Winful Associates

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