After such a long wait, the 85-page Financial Advice Market Review report is nothing but a damp squib for anybody who cares about the advice industry in the UK today.
And this after the fiasco of the RDR, spending £1.5bn creating an even wider advice gap. I do not need to go into detail about where it went wrong but the problem is nobody at the FCA is brave enough to say “we stuffed up.”
This FAMR report is quite clearly a green light for banks to re-enter the market, with much more streamlined documentation and processes, and even a new watered-down definition of advice. The ability for a trainee adviser to work without qualifications for four years is also an outrageous snub to all those who worked hard to obtain Level 4 qualifications and beyond.
In fact, the entire aim seems to be to make it easier for banks to missell on a wide scale, which is exactly what will happen once again. It is as plain as the nose on your face.
Not one of the FAMR’s 28 recommendations concerns any IFA or financial planning firm. When you consider IFAs continue to control more than 50 per cent of the financial services market, this is a true indictment of the FCA’s view of us, especially when you consider only 2 per cent of complaints are against IFAs and of which only a third are upheld. The vast majority of complaints are against banks and this tarnishes the image of the rest of us.
Why is it the FCA board of directors still contains only one token IFA? It is a scandal. The FCA is dominated and controlled by both the Treasury and its buddies the bankers.
Instead of pandering to the big bad world of the banks, why does the FAMR document not truly address the real issues affecting professional financial planners? Where is the investigation into the inherent unfairness of how the Financial Services Compensation Scheme is funded, with the good guys paying for the bad guys? Where is the detail on professional indemnity insurability challenges and the lack of a long-stop?
We all know the public is better served by IFAs and financial planners than product-flogging bankers. Society is better served by professionals that truly care about their clients and build long-term, trusting relationships that make a real difference to lives.
The FAMR seems to be geared towards allowing banks to re-enter the market on very favourable terms, with little regard for the end consumer. The regulator is clearly pinning its hopes on the banks’ ability to succeed with digital or robo-advice but I do not believe they will. Professional independent financial advice is a force for good. The FAMR needs to be re-written with that in mind.
Tony Byrne is financial planning director at Wealth And Tax Management and author of Wealth Magic