Speaking after the merger between Lighthouse Group and Sumus in May, the joint chief executives were in agreement that the principle of treating customers fairly is laudable but that advisers need more guidance.
Streatfield says: “TCF is one of those things that you cannot argue with as three words. Where I think the industry generally needs more guidance from the regulator is in working out exactly what the regulator wants to see as evidence.
“It tells us when evidence is not satisfactory but it would be very helpful if it could tell us from the start. It has been a little shy about telling us what it wants.”
Rosengren says: “This could maybe turn TCF from something nebulous into something which is more concrete.”
The duo believe that there is a problem with servicing lower-net-worth clients as the regulatory burden is the same but the value of the business is less.
Rosengren says: “There are probably not actually enough advisers to meet the demand for advice. Of a population of 60 million, there are probably around 40 million that need relatively regular financial advice compared with around 50-60,000 advisers.”
Streatfield says: “The regulatory requirements in giving any advice is the same whether you are dealing with a wealthy person or someone with basic needs.
“Therefore the process is more cumbersome and expensive the lower down the value chain you get. One does not want to give away controls and standards but you could simplify the requirements when dealing with ordinary folk.”