This was as big a shock for many as meeting a great white while paddling happily.
We now know that the Treasury select committee supports the polarisation of advice and sales and this must be of great concern to all of those who have marketed pseudo-independence so successfully.
Clarity over status with transparency of remuneration brings the long sought professional status to those advisers who have voluntarily raised their standards and improved the quality of service they provide to their clients.
This change is further evidence that the consumer lobby has had major success comparable with that of Aifa.
The loss of the emphasis on the title “planner” has demonstrated that lobbying is not a one-off and I still believe that this segment will self-define as chartered title holders apply for the same status for their firms and the number, size and profile of those firms expand.
Before planning can have its own segment, we need to see that standards in planning are adhered to and that is where ISO 22222 could come in. The RDR interim paper from the FSA underlines the fact that the review is not a five-minute wonder and its shape and style will continue to move until it reaches its final state.
The comment that the proposed split would limit access to advisers is ridiculous. Advice is where the customer comes first. Like it or not, commission levels set by providers is in total opposition to this premise. This means whole of market too. The idea that competence compensates for the recommendation of inferior in-house products insults the intelligence of professional advisers and the public alike.
This interim paper has been welcomed by the majority of advisers, exam entries are increasing daily and the initiatives by Scottish Widows and Norwich Union are a reflection that the thinkers in the industry welcome change and that has to be applauded.
The areas that remain unclear include customeragreed remuneration and the transition to diploma level as grandfathering has been thankfully put to the sword.
The thrust in the interim paper is that providers should have no role in setting remuneration levels challenges them to find a new model and fast. This also leaves many without a clue as to how they charge for their services but this is more an opportunity than a threat and one I am sure that many are equal to.
Grandfathering is hopefully a dead discussion. What is interesting is how the FSA will convince the consumer lobby of the need for transition and maybe it will become transition under supervision. The cost of doing this may be too high. With margins eroded, this may be the driver for many simply selling up.
Many industries are insisting on examinations and ongoing CPD. We need to embrace change or change will be the rocks we perish on.
Whatever we seek to promote – be that multi tied sales-men called partners to promote the illusion of independence or commission maxing national IFAs bemoaning the demise of the investment bond or professional whole of market advisers – we need to continue the dialogue. If we don’t, we have no right to complain.
Robert Reid is managing director of Syndaxi Financial Planning