I was speaking recently with the chairman of one of the country's bigger IFAs.
Both of us get the impression from an article in the June 24 edition of Money Marketing that the LIA wants to see and end to commission in favour of fees.
If this is the case, it would be an understatement to say that we we find it amazing, particularly as we are long standing LIA members and have not been consulted.
Not only would it seal the fate of the IFA sector but it would be a massive disservice to the majority of the public who would be denied independent advice.
Furthermore, clients are better off financially with the current commission system as they avoid VAT and, in the case of pension work, their cost is tax-deductible.
The few times that we have given advice on a fee basis, we have ended up not being paid or only in part. Neither do fees reward us for the 75 per cent of time spent seeking appointments as opposed to sitting in front of clients giving advice.
When will the LIa and the FSA understand that IFAs in the main need to be sales-people first and foremost and not actuaries. By and large, the public have to be motivated into buying our products and do not buy voluntarily.
As an example, stakeholder pensions have been a total flop, largely because there is insufficient commission to justify a face-to-face sales presentation.
As far as misselling is concerned, commission in itself is not responsible, as claimed. In fact, most misselling was done by the banks and insurance companies in the capacity of product providers and their staff were often salaried.
As FSA director Anna Bradley said recently in Money Marketing, until caveat emptor applies to the sale of financial products – as it does to all others – there will always be claims of misselling.
The industry is far from perfect but it is a lot closer to it in the UK than anywhere abroad.
It is largely a case of our nanny state and compensation culture aided by the media which has gained the industry its current atrocious image, not helped by certain lily-livered insurance comp-anies which roll over and pay out compensation on demand (for example, endowments) as it is not their money involved.