Holding a mirror to transparency

One of the supposed watchwords in financial services is transparency.

According to almost any politician, regulator or consumer advocate, there should be transparency in charges for funds, transparency in what and how IFAs are paid, transparency in any extra costs associated with a product, and in the status of an adviser.

In this week’s Money Marketing, we feature what might be described as two row stories on the subject of transparency.One is a spat between Skandia and Selestia on the subject of mirror funds and on just how much of an extra bite may or may be taken out of a fund when it is sold through a life wrapper. In this instance, quite a bit, from Selestia’s point of view, while, in essence, Skandia says its rival is not comparing like with like nor properly including costs.

The other is all about depolarisation. Influential IFA Nick Bamford is up in arms about the way that Barclays describes the way it has picked providers to sit within its multi-tie offering. The phrase which gets Bamford’s goat is “we searched the whole of market to seek out the best providers for each product”.

We can see how this raises the hackles of many IFAs who see former banks and former building societies that once offered independent advice seeking alternative offerings with some relish. They believe what they are seeing is tied financial advice dressed up to look as much as possible like independent advice.

In both instances, the row over fund costs and the row over advisers’ status we suggest the FSA applies a consumer test.

In both cases, is the consumer being informed about what is on offer with such transparency in disclosure documents and menu that they can make their own mind up?


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