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It is regulation that is killing off the IFA species

Essentially, what Liberal Democrat Treasury spokesman Lord Newby is saying is that regulation is killing financial advice, which is true.

I doubt that anyone will want to be an IFA in future unless business conditions improve significantly and we will eventually die out for all but the very rich.

However, if the regulatory burden were reduced in line with the risk that we pose, then our businesses could flourish. We are the firms that can offer that online electronic advice and do it better than anyone else.

I cannot see how it can ever be “free”, although regulators could allow it to appear to be if they wish to promote saving in the mass market.

If the savings gap is to be reduced, then advice needs to be low cost and readily available. The FSA/CPMA need to think carefully about the burden that they impose.

TOM SCOTT

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. Unless or until the FSA faces up to the enormity of its neglected (statutory) responsibilities to regulate the banks, its sustained campaign of persecution against the IFA sector will continue unabated.

    There are, of course, bad apples in any basket, but all the data highlights the fact that the banks’ selling and complaint handling practices constitute boatloads of thoroughly rotten apples which are about as un-TCF as it’s possible to imagine.

    On the news this morning was a report that the FSA are planning to “ask the banks (nicely, of course) to improve their complaint handling processes”, not least in terms of drawing to the attention of complainants their rights of referral to the FOS. Shelia Nicoll’s attempt at appearing to be the smiling face of regulation was about as convincing as Gordon Brown’s chronic attempts to come across as the smiling face of the Labour government.

    It seems incredible (though wearyingly unsurprising) that the FSA has been allowing the banks to get away for so many years with not observing such a fundamental element of the complaints handling procedure.

    Compare this with the action the FSA would take against an IFA firm for such a gross transgression of FSA rules and requirements. There wouldn’t be any “asking”. Rather, there’d be fines, sanctions, an order to bring in outside consultants to bring things up to scratch and possibly somebody struck off for “poor governance”, no messing about. This would be duly followed by an FSA press release with a picture of Margaret Cole trumpeting another triumph for the FSA’s “new intensive and intrusive style of regulation”. Am I exaggerating? I think not.

  2. No Julian, you are simply telling it like it is.
    Shame you are not the new AIFA head.

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