View more on these topics

Independent view

It is no surprise that this year has started out much in the manner that 2002 ended, with much unfinished business, both on the geo-political front and in a number of areas related to regulation.

For most IFAs, the immediate focus is to eke out investment returns for clients in the hostile climate. If history is to repeat itself, then once final decisions have been made in respect of any action in the Gulf, we may see a platform from which modest investment returns might be expected but there is the need to plan for a backstop in a worst-case scenario. The emphasis is on advice.

Looking at history also brings me to the area of regulation, with the FSA having put everyone on notice of numerous areas to be reviewed. There are going to be some fundamental changes to working relationships that are going to affect us all.

While everyone hopes the historic case will apply in respect of investment returns, the concern I have is it may also repeat itself adversely when it comes to protecting the investing consumer.

It is no good trying to re-open the argument on the subject of polarisation as the changes are going to take place, for better or for worse, even though it is often wise to reflect that “if it ain&#39t broke, don&#39t try to fix it” mentality is sometimes right.

At the time of writing, the much delayed results of CP121 are awaited. However, there are two key documents dovetailing with its release that are out for comment and consultation, namely, DP19 dealing with simplified products and CP157 for the examination framework for our sector.

Both of these fall into the half-empty glass scenario where we are hopeful for a positive outcome but where there is the danger of the complete opposite being the end result. We should not allow complacency to end up shaping the framework of investor relations. There is an onus upon us all to be involved in the process, making our opinions known so we can have some input on the outcome.

It does seem sometimes that the end results of regulatory decisions are somewhat schizophrenic at times and there is a mismatch between cause and effect. I see this as a danger in respect of the two papers to which I have referred.

There is no doubt that there needs to be a mechanism to encourage saving among those just starting out in their careers and the less well-off, using a simplified format.

Many of us will recall the days when a simple unit trust savings plan could be established efficiently, with the minimum of fuss and with the knowledge that this was good advice in a less litigious environment. Nevertheless, one had to have a good knowledge of the market and product availability to impart this advice.

The creation of simplified investment products does not automatically mean they are suitable and some knowledge will be required before they are selected, either through an individual&#39s research or, more likely, with some form of advice.

This brings me to the exam framework. The introduction of exams has produced a more professional environment. There is the opportunity to create higher professional standards. It is disappointing in the short term that the consultation document made no specific reference to existing exams. In the short term, it rather puts on hold the study for additional qualifications until a table of recognised examinations is published. Notwithstanding that, the obvious move for regular assessment should again help provide comfort for the investing public in the longer term.

It does seem strange that when Sandler criticised the investment community for not having sufficient understanding about investment products, there are proposals for lower standards of training where we know that this is an accident waiting to happen.

In more recent times, we have all come across examples of the incorrect sales of Isas via the supermarket checkout, resulting in the recent amnesty for this type of contract. It should not be forgotten that the breakdown of polarisation came about because of the huge numbers of “salespeople” who just promoted products on the strength of what they had been told by their management.

Let us not allow history repeat itself and create a free-for-all but ensure our views are made known at every opportunity so we have a chance of influencing the end result. Complacency will certainly not achieve that.

Nick Conyers is a director at Pearson Jones


Britannic offers cash-back on term

Britannic Assurance has released a new term product providing a proportion of the premium to policyholders who do not claim before the end of the term.Like traditional term, the Cash-back Plan pays out upon death during the term, but unlike others, 50 per cent of paid-out premiums will be returned to the policyholder at the […]

Halifax finds house prices have leapt 306 per cent since 1983

New research from Halifax bank tracking the last 20 years of UK housing show property prices have increased by 306 per cent. The average price has leapt to £121,742 from £29,993 since the Halifax house price index started in 1983. It says the north/south divide has widened significantly. Prices in London are now 76 per […]

ABI describes armed forces life cover story as misleading and inaccurate

Existing life cover held by members of the armed forces will not be affected by call up or deployment to the Gulf, confirmed the Association of British Insurers. The ABI has hit out in response to a weekend report in the Times newspaper which it described as misleading and inaccurate.

IFAP urges public to seek advice as report shows one-third have no savings

IFA Promotion is urging consumers to book a financial healthcheck with an IFA after its research revealed that a third have no savings. The report – Get Saving! – shows a chasm between the rich and poor in the UK, with vast inequality in the ownership of £2.7trn in personal assets. IFAP says 10 per […]

Johnson Fleming is a finalist at UK Pensions Awards 2016

The UK Pensions Awards shine the light on excellence and recognise the advisers, providers and investment managers that offer the highest level of innovation, performance and service to occupational pension schemes and their members. This year’s awards looked at advisers and providers across 31 different categories and were rigorously judged by a panel of senior […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm