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Light up the rules

Although I agree with the regulator’s move to lighter-touch and principle-led compliance, I sometimes miss the old-style heavy-handed compliance regime with thousands of pages of rules and guidance to read. We had so much to read and understand through documents issued, particularly by the Treasury and the FSA. Never a dull moment as the financial services’ chattering class discussed the finer points of Mifid and the rewrite of the conduct of business rules.

Am I losing my marbles asking for more written guidance? I may be but let me ask you three simple questions and, without jumping on Google, try to answer…1: If it is treating the client fairly for an IFA to want to pass the client on to a multi-tie or single-tie adviser (highly unlikely but could happen). Can he or she ? 2. What Management information do I need to collect to ensure TCF?3. On what days of the week can IFAs use Gabriel, the new electronic reporting system from the FSA?

We are expecting the retail distribution review feedback statement and we should prepare ourselves for a change or two from what we were told and read back in June 2007 with the 111-page RDR first discussion paper.

If you remember, the RDR was set up to address the root causes of persistent problems in the retail investment market, looking at whether depolarisation is working to the benefit of clients (and the industry) or not. Whatever Dan Waters stands up to deliver in his 30-minute key proposals in the RDR feed-back statement on November 25, I will eat my hat if the outcome is not that if any adviser wants to calls themselves independent they must give whole of market advice.

I have always voiced my concern over how on earth non-sophisticated clients are expected to understand the differences in status when they may be recommended the same product by every distribution channel.

Before the introduction of depolarisation, I helped IFA Promotion research what consumers thought of the new proposed status disclosure documents by sitting for hours with many individuals. The findings were amazingly naive. New clients would walk through our IFA door and insist they pay fees because they had read in the press this is the best way but the press at that time did not say if you were earning just above the minimum wage and had debts, commission offset against fees may be better advice.

I like research and am disappointed there is not much research concerning the foundations for the RDR feedback. A recent research paper I have read with interest is the annual Scottish Widows Women and pensions report and the supporting article, What Women Want. As one of the female commentators on Money Marketing, it would be remiss of me to not comment. It reads like half the population is an underclass with lower pensions, average earnings lower than men’s and in financial services the figure is 41.5 per cent lower. Women also lag behind men in pension savings and will do for the foreseeable future.

On the other side of the coin, what about the fact that there are now more women millionaires aged between 18 and 44 than men, according to figures from the Inland Revenue and women millionaires will outnumber the men with millions by 2020 helped by longevity, shrewd investments and divorce. Please note the “shrewd investment” comment. If women had invested regularly and in sizeable amounts in a personal pension which was vesting today, would they be happy due to the battered markets and low annuity rates? I think not. We need to think carefully how we attract women’s monies into long-term savings and a traditional personal pension is not, in my mind the solution.

kim@techandtech.co.uk

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