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Herding cats: FAMR bid to unite regulators and advisers falls short

Natalie Holt, journalist with Money Marketing Photo by Michael Walter/Troika

Once upon a time, advisers and providers were hopeful that a wide-ranging Government review into the future of the advice market could deliver better outcomes for consumers. Money Marketing also got swept up in this wave of optimism, calling it an “advice revolution” in the making.

But little more than a year on, and you would be hard pressed to find many advisers who are really engaged with the Financial Advice Market Review project, or who genuinely believe it will help close the advice gap, reduce the cost of advice or any of the other lofty aims FAMR originally set out.

What was once a great white hope to alleviate some of the ills brought about by the RDR has now been reduced to a symbol of regulatory fatigue among advisers who have heard all these promises before.

The process got off on the wrong foot with only one adviser being included on the FAMR expert panel – a clear source of frustration for delegates at Money Marketing Interactive earlier this year. The working group (one step up from the expert panel in terms of delivering on FAMR’s recommendations) is not much better, with the addition of one more adviser and St James’s Place chief David Bellamy (who it is fair to say, is someone some advisers may not feel represents their interests).

Advisers’ disillusionment also comes from past experience – fairer funding of the Financial Services Compensation Scheme and the lack of a long-stop are just two interminable debates covered off through FAMR with which advisers have all but lost hope on resolving.

The FAMR initiative is something of a sprawling mess, trying to cover so much ground as to appear meaningless. Add to that the unenviable task of trying to corral the FCA, the Treasury, the Financial Ombudsman Service, the FSCS (indirectly), providers, advisers and consumer groups – all with different motives, and it is no wonder it is hard to make sense of whether FAMR is working to bring about positive change in the advice market.

One adviser likened it to the RDR – back then they were invited to countless roadshows and felt part of the conversation. Not so with FAMR. If there is good work being achieved here, more needs to be done to shout about it.

It is a bad state of affairs when the RDR is being harked back to with something akin to fondness.

Natalie Holt is editor of Money Marketing – follow her on Twitter here

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Comments

There is one comment at the moment, we would love to hear your opinion too.

  1. The biggest shortcoming of the FAMR is that its agenda is bereft of a number of fundamental points in urgent need of attention, such as:-

    1. A stop to the Treasury confiscating all FCA fines, which should instead be allocated to the FSCS. This could well significantly offset the skyrocketing levies being imposed on the adviser community and help reduce advice fees.

    2. A complete redesign of the FCA’s GABRIEL Returns system so that it can identify and home in on potentially dodgy practices. At present, it doesn’t even look at what’s entered. If the totals cross-tally, the system accepts them and that’s it. A pointless waste of advisers’ time and money.

    3. A system of special permissions for firms wishing to advise on/flog UCIS (not least ensuring that they have adequate PII cover).

    4. Restoration of a longstop against stale complaints.

    5. Forcing the FCA to abide by the Statutory Code of Practice for Regulators.

    6. External oversight of the way in which the FCA purports to regulate. In this regard, the TSC tries its best but has no powers.

    7. A cap on the FCA’s budget which just seems to go up and up and up, year after year.

    8. A system of fines and other sanctions for regulators who screw up.

    9. A clampdown on phoenixing (which the FCA has declared it a bit too difficult for it to tackle effectively).

    10. An FAMR committee that’s truly representative of the adviser community. Most of the present committee have no direct experience at all of what advisers do.

    The list goes on, but this’ll do for starters.

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