After 2012, it seems distribution will be divided into the following categories – banks, supermarkets, and national retailers, direct offers by way of TV commercials, newspaper ads, the internet, direct salesforces and chartered financial planners, who will be highly qualified and mainly fee-based and serving HNWs.
All these categories, except the latter, will be unable to advise potential clients about anything except their own products so what will happen to clients who need advice on existing financial arrangements because, after 2012, the GP IFA will have been consigned to history?
The problem with the GP IFA for the FSA is that the market is so fragmented due to all the sole traders and two and three-person bands that it cannot regulate it other than by its never ending succession of hindsight reviews. This is an organisation that failed to realise self-cert mortgages, four to seven times income multiples and banks’ conduct of business were going to lead to big trouble.
The FSA’s solution is to bring in ideas such as the RDR and TCF to divert attention from the problem, which is the banks. The most important part of the FSA was to protect the public and instil confidence but it has done more damage than any group of advisers ever could have done.
DPB Independent Financial Services, Edgware, Middlesex