View more on these topics

Keep IFAs sacrosanct

If you missed the last polarisation review, don&#39t worry, there will be another one along in a minute.

This seems to be the first consequence of last week&#39s announcement from the FSA which was endorsed with indecent haste by the Treasury with no opportunity for comment. There will be the preliminary relaxation of rules on regulated products such as Cat-standard Isas and stakeholder pensions (surely the real reason for change here).

And then we are back into review territory. Gap-filling, multi-ties, who knows what will be back on the agenda? The outcome seems open although change is in the air, aimed not at the IFA market but at the deficiencies of direct-sales operations in offering full choice to their customers.

The simple and elegant solution offered by Aifa of improving access to independent advice to overcome these deficiencies without market disruption has been left by the wayside.

The fact that two bites are being taken at this particular cherry suggests indecision at the FSA. They really do not know what to do. They must have looked over the abyss into the multi-tie world and pulled back from the brink of a move which would have caused a nightmare for compliance and confusion for consumers.

They are justified in their caution. Their limited experiment with rule relaxation will demonstrate that Aifa&#39s concerns over the investor in a non-polarised world are well founded. There must be fully disclosed research about consumer attitudes based not on academic surveys or even focus groups but on what is going on in the real world. We have written to the FSA telling them they should not take any further step without pro-per evaluation of how their experiment is working. This makes a time-table of mid-2001 for the next stage of their review look very optimistic. Stakeholder only comes on stream in April. What chance is there of a proper assessment of the response of investors receiving advice in a new, non-polarised environment by the summer?

There was one more positive outcome. The FSA has bundled the issue with a review of disclosure. That has to be made to stick.

Cons umers value independence but the regulators have to ensure that disclosure of any links to any providers is made up-front. The word “independent” has to be made sacrosanct, to be used by those who can advise across the market. No one else should be allowed within a mile of it. We will be telling the FSA how to achieve this.

The FSA announcement had, as with all good regulatory documents, a long annex. It does not yield many gems but there is a reference to FSA analysis of fees versus commission – yet again. Readers of Money Marketing will know my views on this issue (see last week) and I do hope that time is not going to be wasted reheating tired arguments that method of remuneration is central to this debate.

Recommended

Chase Fleming Asset Management – FF-US Strategic Value Fund

Wednesday, 15th November 2000.Type: Sicav.Aim: Growth by investing in a value style biased portfolio of US companies.Minimum investment: $5,000.Place of registration: Luxemburg.Investment split: Financial services 30.3 per cent, consumer cyclicals 0.8 per cent, consumer staples 10.7 per cent, communication services 10.4 per cent, energy 9.9 per cent, capital goods 9 per cent, utilities 7.3 per […]

Britannic seizes on revival

Britannic Asset Management is capitalising on the recent investment trust revival with the introduction of the Britannic global income trust.The trust aims to deliver growth and a high level of income by investing in global equities and split capital ordinary shares.There are two share classes. The geared ordinary shares have a target yield of 8.75 […]

Chase Fleming Asset Management – FF-US Strategic Growth Fund

Wednesday, 15th November 2000.Type: Sicav.Aim: Growth by investing in a growth style biased portfolio of US companies.Minimum investment: $5,000.Place of registration: Luxemburg.Investment split: Information technology 45 per cent, healthcare 19 per cent, consumer discretionary 14 per cent, industrials 8 per cent, financials 7 per cent, consumer staples 5 per cent, telecommunication services 1 per cent, […]

Credit Suisse Asset Management – Credit Suisse Global Focus Fund

Wednesday, 15th November 2000.Type: Oeic.Aim: Growth by investing in 50 to 60 of the best performing stocks worldwide.Minimum investment: Lump sum £1,000, regular savings £50 per month, Isa £100 per month.Investment split: US 32 per cent, UK 10 per cent, South Korea 4 per cent, Singapore 2 per cent, Portugal 2 per cent, Netherlands 4 […]

Happy while you work

Well we’ve had scorching weather (yes even up here in Scotland!) and now the Euros 2016 are on – you can’t blame people for wishing life was just one big holiday.  With all these distractions it sometimes feels like work just gets in the way of having a good time! But sunny day skivers are […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment