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Mark Garnier: FSA has made a ‘pig’s ear’ of RDR

Treasury select committee member Mark Garnier has blasted the FSA for making a “pig’s ear” of the RDR and showing “contempt” for the TSC.

Speaking at a Social Market Foundation fringe event on savings at the Conservative conference in Birmingham today, Garnier said there was an “extraordinary” lack of interest in the RDR from MPs until recently.

He said: “It was extraordinary as nobody in parliament had taken the slightest bit of interest in it until 2010 when we had a couple of debates on it and a TSC investigation where we came up with a couple of recommendations.

“But the FSA just shrugged its shoulders and said, ‘so what?’. There are an awful lot of investment managers and IFAs who will be put out of business and I think we are going to lose a lot of advice as a result.

“The FSA has made a pig’s ear of the RDR and its contempt for the TSC is not helpful. It is going to be interesting to see how it pans out and I hope it does a good job of getting advice to small-time savers as it is those people I really care about.”

The TSC recommended the FSA delay implementation of the RDR until 1 January 2014, but the proposal was swiftly rebuffed by the FSA to the anger of MPs.

Garnier also criticised the performance of the Money Advice Service.

He said: “When the MAS came before the TSC we were a little robust with it and its chief executive Tony Hobman resigned shortly afterwards. I do not know whether that is an achievement or not. He seemed like a decent bloke but he was being paid too much for the job he was doing.”


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There are 65 comments at the moment, we would love to hear your opinion too.

  1. Then please do something about it Mr Garnier!!!

  2. What amazing revelations! Pity they’re several years late.

    I’m also very glad he cares about small savers – but, by inference, he doesn’t care about anyone else.

    Not good! I wish these people would listen to themselves, sometimes.

  3. You are powerless aginst the force Mr Garnier

  4. Here’s the only decent politician who deserves his pay.
    Mark Garnier has been one of the few MP’s who have taken up the cudgel for the IFA against the at times nonsense of the RDR. He recognises that the lower net worth clients will loose out by the ban on commissions as a means to pay for financial advice.
    Since the debacle of the RDR has been known I am very disappointed on the malaise of the politicians in sitting on their well-paid fat a***es and ignoring the plight of a good many of their voters. After next year it will become plain that there has been a monumental error with regards to commission payments by the RDR, far too late for the many experienced IFA’s and small firms who have been forced out of business.
    Questions need to be asked and MPs should hold their heads in shame for allowing the RDR to exclude good sound financial advice from the common man..

  5. Mark Garnier was vocal about this but he was blocked by Hoban. RDR is a total mess and comes at a time when keeping people in employment and stimulationg growth in the economy is of paramount importance..

  6. Mark has been a great defender of IFAs and the problem he faces, even as a member of the TSC is that it does not matter to the FSA, they are accountable to nobody, especially the TSC, because Parliament thru FSMA allowed that to happen.

    It will take a lot to undo that and it will require more than soundbites at fringe meetings to achieve it. I also wonder if he supports “Call me Dave’s” view on FSA fines going to help the troops wounded on his watch and others?

  7. Garnier was NOT vocal at the TSC hearing. He barely opened his mouth.
    Later, when Chris Leslie of labour wanted the FSA to be more accountable, Garnier would not support the motion. This is all political claptrap and posturing by Garnier.
    Vote UKIP at the next election and show the lot of them how sick and tired we are of being ignored.
    Garnier is just trying to pretend he is interested in the plight of IFAs’ so we will vote for him next time around.
    Voting for UKIP is the last thing the conservative/Lib Dems want.

  8. Don’t knock Mark Garnier as he and Harriett Baldwin have been fighting our cause since day one but as you know Hoban was the ‘non listening spanner in the works’ that wouldn’t listen. Both of these MPs have financial services backgrounds and could see what a mess of it Sants and co would make of it, unfortunately they were untouchable thanks to Gordon Brown!!!!

  9. Larry in London 8th October 2012 at 1:23 pm

    Hello Playmates!

    The TSC was steamrollered by the FSA. The FSA steamrollered everything and everyone in their greed for power and the pay to suit their new elevated positions.

    It will be interesting to see how many hundreds of thousands of pounds of IFA’s money will be spent on the FSA Christmas bash this year, just at the same time as thousands of IFAs will be denied their livelihoods. How ironic!

    Remember, when someone goes out of business it is financial ruin for them. For many thousands of good, hardworking people to be driven out of business by an unaccountable bureaucracy is a tragedy and a scar upon the democratic landscape.

    There is still time for our elected representatives to do something to avoid this. If they are interested. But that, of course is a big ‘if’.

    Love and kisses

    Larry! xxx

  10. A Pigs Ear is an understatement. The FSA are bringing in regulation that benefits no one except themslves to show that they are doing a job. Even writers of finance in newspapers have now realised that a great deal of consumers will be dis advantaged because of the FSA. It is time that MP,s finally told the FSA that they run the country not Canary Wharf

  11. It is never too late for the Treasury & the TSC to get involved and re-think this fiasco. Unfortunately I don’t think they will & the idiot’s at Canary Wharf who dreamt up this destruction with no thought of what the consequences will all be employed elsewhere on the ‘Old Boys Network’. Turner already has his sights on ruining the Old Lady!

  12. ken170647 youtube 8th October 2012 at 2:09 pm

    For an IFA there has to be a fee-based arrangement in place for customers. Customers have a choice at the moment of how to pay for advice. Customers can either pay a fee or agree an amount of commission the adviser will receive. Under the current system providers can also enhance allocations for customers. From 1 January customers will have no choice about how they pay for advice and they will not be offered any extra allocations by providers. How can this attack on customers’ current rights be justified?

  13. I would say this is ‘too little too late’ but at least someone is saying it as it is. What really are the benefits of RDR for the majority of the population in the UK, as I’m personally struggling to understand why this has been allowed to develop along the lines it has? Up skilling advisers knowledge is great, but the R0 exams I have taken recently have been promptly forgotten about the day after taking them. All I proved when passing these is I can memorise information a non-practitioner thinks I should know when it hasn’t been anyway relevant in what I do on a day to day basis for over 30 years. Fantastic I’m now all clued up on MiFID which has been in force for four years now and is the cornerstone of the European Union’s regulation of financial markets. But seriously, what does the average man or woman in the street think of me having that wonderful piece of knowledge? In fact what do I personally think of me having that wonderful piece of knowledge?
    A pigs ear indeed!

  14. So why do we bother voting for various parties at election time, if they are impotent in the face of mindless, unaccountable unelected bureaucrats?
    It appears that the FSA are more powerful than the government.
    We need an explanation from Mr Garnier as to why we have an organisation that can refuse to listen to parliament, as I believe a law will need to be passed before it is compulsory for the FSA to do as the government or at least the TSC wishes.
    Or is this a coverup? Will we see such a law passed after the RDR with the government saying they could do nothing before 01/01/13 when in fact the situation suited them all along?

  15. The FSA have made a “Pigs Ear,” of RDR.

    In other news, the Pope is discovered to be Catholic.

    Its a bit worrying that the TSC of the elected representatives has gone head to head with the FSA and lost.

    Democracy is not being served here

  16. And Government has made pigs ear of controlling the FSA.

    They are all useless and what the point of Government is if they cannot control the regulator when they clearly have concerns and issues which the regulator ignors staggers me

    Glad I am leaving at the end of the year.

  17. I predict that it will take 2 years before RDR is taken apart and re-thought. With some new kind of payment from provider to seller to market their product. It won’t be called commission but that’s basically what it will be.

    This will happen for two reasons. The first is that the EU won’t ban commission so the UK will eventually step back into line. The second and more important reason is that there will be a slump in the amount of money invested in British companies through equity backed products. There will be no-one to advise, recommend and sell.

    It will be a bit of a free for all as the entry requirements to FS will need to be reduced as those who will be put out of business are unlikely to return.

  18. This shows the woeful democratic deficit in this country. I’m unlikely to vote for the swivel eyed UKIP candidates as suggested above because this could result in a Labour victory. Don’t forget who gave us the FSA and the FSMA in the first place.

    Having said that I have particular contempt for the Tories because they have allowed Gordon Browns insane regulator to continue its appetite for destruction on their watch.

    Conclusion: Politicians – they are all as bad as each other and none of them should ever, under any circumstances, be trusted.

  19. Well done Mr Garnier!
    Yes you have got the publicity you thought this statement might produce.
    But please tell me, if I were to do an audit, what EXACTLY have you achieved by the speeches and pandering to a desperate audience only too willing to clutch at any straw? I see no definable or positive outcome and nor was there likely to be.
    The only way would be a change in the law, altering the act to make the regulator more accountable and to rein in its powers and that is something that is most unlikely to take place. So all else is just posturing and hot air – exactly what we can always expect from all 650 in Westminster.

  20. Will the BIG RDR white elephant in the room please stand up now and show yourself to these MP mumpties.

    RDR was a pigs ear to start with now its turned into a big pile of pig S~~t for us to clean up !!!!

  21. Europe have said NO to a commission ban. The FSA are not accountable to our Government but one thing they cant do is thumb their nose at Europe. Europe will not want the UK to have a unilateral ban as this will harm European advisers who have UK based clients. The UK must now seek permision from Europe to go ahead with the ban , Im not sure they will get it.

  22. So we had 4 years notice that RDR was coming and now what everybody seems to want is further delays even though some of us have made the effort to become RDR compliant. I just wonder who’s going to pay the compensation if RDR doesn’t go ahead as I for one will be seeking compensation from the regulator for having to sit exams that are no longer giving me any benefit to differentiate myself from less qualified advisers who chose not to take exams instead they concentrated on writing business that’s probably going to end up in complaints that I have to pay for through higher FSCS levels.

    The whole process may not be liked by the industry but for God’s sake something had to be done, because the industry was not prepared to come up with ANY coherent recommendations until it was forced to. That is a reality.

    No doubt I will get more comments from people who just decided RDR would never happen. Even if it was to be amended, are you seriously thinking that change is not going to come to our industry with what has happened in the last 10 years?

  23. Well Said Harry
    He is just posturing. He thinks we are stupid enough to believe he is on our side or that we are in any way shape or form a part of the “Big society” or “all in this together” or whatever soundbite he cares to employ.
    Hot air indeed.

  24. Ladies and Gentlemen !

    Get off your backsides and protest to your MP, I did and to the TSC and to the Chancellor of the Exchequer who will soon see a detriment with reduced tax revenues from those forced out of work or out of business and lower capital input into the markets for business expansion.
    Write to Jeff Prestridge at Mail on Sunday – Email –

    You have a voice, put your protests in writing.

    Email –

    If your MP, the Chancellor, the TSC and the press all get hundreds of emails and letters expressing dismay at how we are being treated and how the consumers will suffer, maybe, just maybe, someone will do something about this mess BEFORE it is too late.

  25. Saint Francis of Assisi 8th October 2012 at 3:23 pm

    Mr Richard Wright – If you are right I will laugh so hard I’ll probably have a seizure!

    Clearly, it’s not actually funny. Some of us have gone out of business, some of us are struggling and all of us have wasted months of our lives trying to sort this out but it would be worth it to show to the world that what we have is actually a World Class Incompetent Regulator.

    And (the cherry on the icing on a particularly sweet cake), Sants would struggle to work again AND any chance of a knighthood will be finished!

  26. @ Peter Herd
    No one mentioned exams Peter.
    It is the unintended consequences of RDR that is the bugbear here.

  27. Personally I think the improvement in knowledge has been a good thing.

    The number of cases I come across over the years where basic errors have been made e.g. WOL written for IHT not under trust is quite worrying.

    What I do find annoying is being dictated to on how a client should pay for advice.

  28. the way the FSA is set up means it is not accountable to anybody except the Treasury who may get rid of board members. Keep at it Garnier, there is a chance here to do something and say something right.

  29. ken170647 youtube 8th October 2012 at 4:02 pm

    It’s not possible to have a unilateral commission ban. One of the first things the Regulator did when this crazy idea was first mooted was approach European regulatory authorities to try to convince them that the way forward was to outlaw all forms paying for advice other than by fees. At one time it looked as though it was a successful venture. But now that Europe has not listened to our Regulator the commission ban will have to be rethought. The Regulator will now have to listen to the TSC and delay the commission ban before any more damage is done.

  30. Conservative Party Conference.

    David C:” I am postponing the intruduction of RDR until the real impact on both the public and independent advisers is established positively The earliest date will be 1 Jan 2014″

    That would give the strongest indication yet regarding the damage done to the financial services industry.

    Come on David – do it!

    . .

  31. @Peter Herd

    I think you can relax – the FSA won’t back down.

    This is not about exams. It’s about the stupidity forcing a system of fee charging on a business that doesn’t want it and nor does its customers.

    It’s about complexity, unfair rules, VAT, retrospective reviews, unfair compensation payments, a “consumer champion” FOS that doesn’t need to abide by English Law…etc

    I could go on – but I suspect you get the idea.

  32. Financial Advisers have a choice of organisations, such as the PFS and IFS (plus others) who should be seeking to represent our interests and be involved in regular consultation meetings with the FSA, the FOS and the FSCS. as far as I can see these bodies have just been collecting fees for exams (and they will have done very well recently). However,although there has been an occasional comment from them I do not recall any of these bodies expressing real concerns about RDR or taking a stand against the FSA. These bodies seem to be toothless and I am only a member of one of them as I need the exams and the SPS. If these were really prestigious bodies they would be part of a regualr consultation forum with the regulatory bodies and seeking to not so much water down RDR but to make it workable and more relevant. Would the Royal College of Nurses, or the General Medical Council (and other such bodies) sit back and allow a huge proportion of their members be put out of work without proper meaningful consultation and registering protest where required, and seeking to rally their members in a collective fashion. Yes the FSA/FCA has, is and will continue to casue adviser problems but are they really seeking to rasie standards or just impose their narrow views on an industry where many of them have not worked and do not understand. Even Europe, which I understand was supposed to have been the catalyst for RDR is now watering down the proposals on commission. The industry has been ignored by the FSA, Parliament (in the form of the TSC) has been over ruled by the FSA, and the various industry bodies have taken a back seat and collected exam fees.

    The average age of advisers is rather advanced and many have left the industry, many of the banks (no matter what anyone thinks about them) are quitting the advice business, the networks are having problems of their own (how may are making losses and going out of business). Who are the losers here, the public who need advice. I am all for raising standards and for weeding out the cowboys but the FSA has always ahd the power to do that, but as in so many things the FSA has failed. That failure is becasue they are against the industry rather than with the industry.

  33. @ Peter – Hi – I’ve done the exams, bene adviser charging, taken on apprentices, but I while I would say that the ideas of the RDR were laudable, the RDIP (as that is actually where we are now, at the implememntation stage which was originally to be called the RDIP) is a crock of s**t and is going to cause a lot of consumer detriement.I do however think it is pretty much too late to steer away from the iceburg (most of the senior officers and captains at the FS jumped ship long ago). We just have to hope there are enough suvivors in the lifeboats and they stay afloat lonng enough to reach another shore and rebuild things.

  34. Nicholas Pleasure 8th October 2012 at 4:51 pm

    I hate the FSA and everything they do and say. I suspect I will grow to hate the FCA even more. I hate all MP’s, even this one, who talks a good game but fails when it comes to delivery. I hate the CII, PFS, AIFA and their horrible local dribbley committees. We have been failed by everyone.

  35. In the World of sport (boxing for example) when the regulator became tyranical the members of that organisation decided to form another body.

    I often wonder why the institutions have not turned against the FSA and created ‘non-regulated’ companies and offered products through those ‘non-reglated’ companies over which the FSA would have no juristiction.

  36. Hi all, I received this today by email and thought it should be shared… I will leave you to form your own opinions and do what you can for the good of the industry and what is still left and worth saving!

    You probably didn’t notice the latest interview with Linda Woodall at the FSA….

    Reading into the logic of the regulator leaves a cold feeling of cronyism, at best the regulators view can only be described as incredibly ignorant perspective.

    May I boil down and share an interpretation of these FSA “pearls of wisdom” for you?

    So the FSA says…
    1. Friction is inevitable between entrepreneurs and the regulator (and this is good)

    2. The regulator is concerned with customer detriment and entrepreneurs are often not.

    3. The FSA has met firms who personify the types of firms it would like to see thrive post RDR.

    (Here is the link for later if you want to check the actual archaic comments made:<> )

    A better perspective…
    1. Friction and tension come from a lack of clarity and mutual understanding between people or groups. This is to be avoided and is bad.

    Is tension a good thing between members of a family or between countries? Is friction a goal which organisation aim to foster between employees? No.

    A willingness to accept tension and friction is to absolve responsibility for running an effective organisation or an effective relationship. To state that this is actually a goal for the organisation? What a shocking manifestation of the FSAs insular culture?

    2. Entrepreneurs are good people whose efforts benefit customers, they are also actually only successful to the extent which they benefit society.

    Entrepreneurs start and run businesses; these businesses are recompensed for the contribution they make to society by their earnings.

    The products and services making up this contribution are occasionally brand-new to society or more often they are improvements on what already exists (usually quicker, cheaper or with better quality or service etc..).

    Entrepreneurs consistently making marginal improvements (or massive ones) are doing so in order to benefit the customer, this is the best thing about the “law of competition”. This relentless drive for profit from contribution to society should be encouraged.

    3. The FSA have absolutely no right whatsoever to choose the “type” of firms who will be successful in the UK Financial Services business, that’s the job of the UK public.

    The regulator must stick to its Four statutory objectives, it must not be allowed to develop along its own lines. Voicing its opinions as to who should succeed in business (or even that is has an such opinion) breaches the law of competition. This crosses the line into cronyism and away from regulated capitalism.

    An old regional manager in the North West at the Woolwich once warned the author to be careful with his exuberance for his craft… “people recruit people like themselves” he warned “so the further up an organisation you manage to put a plonker then the more harm they will do to it”

    Does this analogy remain true for industry and society as a whole?

    How long will this industry be held back and destroyed by an expensive regulator holding to these harmful and archaic perspectives?

  37. @ Richie

    Because the government made it illegal. Remember the Financial Services Act 1986???

  38. @ Nicholas 4.51pm. Dont let it get you down Nicholas. Look on the bright side – Friday’s coming.
    @Peter Herd – Peter if RDR goes ahead, having the qualifications wont differentiate you from everone else either anyway as they will also have them if theyy are still trading on 01/01/2013. Good luck with looking for compo from FSA/FCA. They can legally only be sued for deliberately acting in bad faith (which by the way is alomost impossible to prove in law).

  39. Look like I am the only one looking forward to RDR, you have to look on the bright side folks and get use to change.

    Are you all saying that people will stop saving because of RDR?

    Are you all saying that people will not need advice?

    Are you all saying that people will not be prepared to pay for something they benefit from?

    If you have a negative answer to these questions then I wish you good luck in your new career.

    If you can see the positives then you will prosper and I welcome you to the club. RDR is bad only for fund manager and provider it is good news for adviser you only have to openn you eyes and see that client love you service and hate provider that are ripping off customers.

  40. ken170647 youtube 9th October 2012 at 9:53 am

    The problem with RDR has always been the linking of higher professional qualifications for advisers with the ban on the rights of customers when it comes to paying for advice. To ban commission rebates and extra allocations when a fee paying option is and has to be available is an infringement of customer rights. Who could disagree with higher qualifications? I am perfectly happy with that, and the annual SPS. Nothing wrong with that. A laudable aim! But then to link it to restricting customer choice! What a disaster!

  41. We may well have a ‘pig’s ear’ to deal with going forward – but look on the bright side, the FSA have the ‘silk purse’ for themselves. Great work!!!
    @ Peter Herd – top post 🙂 I think you may well be the only one looking forward to RDR! Just make sure you turn the lights off on the way out. Great final paragraph – you one of our eastern european brothers by any chance?

  42. @ Peter Herd

    Back in 2006/08 there was a surge of support for the RDR from many who believed it would create a better environment. Sceptics, like myself, realised that the policies were wafting up from people who were clueless – totally unqualified to prod barbecues let alone determine regulatory policy.

    Since 2008 there has been a gradual realisation that the world will not be a better place. Advisers have and will continue to leave the industry – not by their own choice, either.

    The main plank on which the theorists views rest is consumer enfranchisement. This will be measured by whether more or less people engage with the industry,

    In truth, most of us know the answer in advance because it is staring us in the face.

    What will happen when the pressure on the Exchequer is such that taxes have to rise and social services are restricted further? When will the Govt see that financial services is beneficial in that it relieves the strain on the infrastructure of UK plc?

    The misguided policies of today will create a largwr underclass for tomorrow where claiming means-tested or other benefits will become the norm.

    Hector, Callum, John Tiny and the others will be sitting in their gin palaces oblivious and uncaring.

    Fiscal responsibility indeed.

  43. Peter Herd – You are funny !!

  44. It is frightening to think of the amount of attacks IFA’s have been subjected to, commission disclosure, RDR in all its glory, G day, the worry of Capital adequacy, PI insurance & FSA fees moving forward, to name but a few!!! not a very sound basis for business stability, & what about TCF, don’t make me laugh.

  45. I’ve heard so many of you say that you represent your customers and you are campaigning for better customer choice when in reality you’re looking to protect your businesses.

    That’s fine but don’t disguise your actions as acting for the best interest of the customer because in reality what we are all talking about here is making sure that the client is fully aware of what they are paying for.

    You cannot say that product biased on commission bases has not happened because it’s been clearly demonstrated that it has in the past and so our industry desperately needed a system where commission biased on products needed to be done away with.

    As regards to someone’s earlier comment, I’m English, live in the UK, and run a small practice so I think I understand the pressures of a small IFA business.

    And while we’re on the subject of disclosure why is it that people choose to be an ominous or come up with a fake name when criticising somebody who has a point of view.

  46. philip spierling 9th October 2012 at 2:04 pm

    @ peter

    if i decide to purchase a new car, there are numerous choices in which i can choose to pay for it.

    i could pay out right in cash.

    i could decide to lease the vehicle.

    i could choose a hire purchase agreement and pay over a period of time.

    imagine if the goverment decided that we all had to pay the full cash price up front.

    do you think this would lead to a fall in new car sales ? would this be fair ?

    what is wrong with a choice of ways to pay, after all this is the UK and not north korea.

    just a thought , thats all !!!!!

  47. @ Philip
    just like the UK
    North Korea also pretends to be a democracy
    (Democratic people’s republic of Korea)

  48. philip spierling | 9 Oct 2012 2:04 pm

    There is absolutely nothing in RDR that will prevent you from charging in the same way as you have outlined in your argument.

    You can charge client an upfront fee and ask the payment over a period of time and even come up with the credit agreement if necessary.

    Nothing in RDR will prevent this type of charging system it even allows you to make the deduction within the plan as long as it is clearly marked as an adviser charge.

    So once again please explain to me what the problem, as the client can pay for the fees either over time or upfront, I even suspect that some clever person will come up with a loan backed advice system that is RDR compliant.

    I just think that our industry is lacking imagination and maybe that’s the problem.

    The fact is the client paid for advice probably several times over with the old commission system and the reality is this system suited the industry more than the consumer.

  49. Peter Herd – bless your heart !

    ‘The world according to Peter Herd ‘

    For someone clearly as smart as you – you aint ‘arf got a lot of time on your hands !!

  50. The behaviour of the FSA with regard to the FSA is hardly creditable. Consider:-

    1. The FSA launched the RDR on the basis of a massively (and probably quite deliberately) understated estimate of what it’s going to cost (already more than three times the original figure of £600m),

    2. the FSA has continually extended, augmented and bolted on endless extras to the original prospectus,

    3. the FSA has resolutely ignored all representations for various elements of its RDR to be modified or relaxed (e.g. its stance on commission from top-ups to legacy products),

    4. it’s completely underestimated (or deliberately understated) the number of firms going/likely to go to the wall (from where exactly did Hector Sants get his stated range of between 8% and 13%?)

    5. it’s steamrollering through too many changes all at the same time, with complete disregard for all the other pressures facing the industry (not least its never-ending programme of hindsight reviews and dumping onto the IFA sector the costs of provider failures such as LifeMark and ArchCru). And, as others have pointed out,

    6. it’s behaved with total contempt for the TSC (as exemplified by Sheila Nicoll smirking insolently in front of the TSC at her appearance alongside Hector Sants in March 2011).

    But hey ~ that’s the price of progress and you can’t make an omelette without breaking a few eggs. Never mind what anyone else might think. In some ways the industry probably will be better after the end of this year, but it”ll also have suffered a great deal of damage as well. As yet, nobody knows whether or not that damage will turn out to have been a price worth paying.

  51. Compared to the RDR a pig’s ear is a thing of beauty.

  52. @ Peter Herd
    I’ve said before, “A turkey voting for Christmas”

  53. I’ve just sent a copy of this article to my MP and asked what Parliament is going to do about it.

    Who runs this ******* country?

  54. Derek Gair | 10 Oct 2012 8:23 am

    I see no one answered my point though which just shows that people who are so against RDR can not even answer a simple question and point raised.

    I like my world it is and will continue to earn me a good living whilst continuing to benefit my customer.

    If you put as much effort into trying to offer services that benefit your customer rather then the time you spend complaining about RDR then we could have a great industry to be proud of instead of being the villains that the general public sees everyone in Financial Services.

    I want someone to explain what has change as commission is a charge just a a fee is!

  55. Peter Herd – Precisely YOUR world NOT mine (and I suggest probably not anybody elses either) so dont try to tell anyone how to run their world you just get on running yours Frankly, I could not give a monkeys what you do if it works shut up and get on with it.

    Listen why are you worried about commission (or the rights and wrongs of it) it doesnt affect you does it – if you are successful doing what you do why are you so concerned how anybody else makes a living – your clients are happy so what do you care. If you are right then you will be even smugger than you are now and every client (even mine) will migrate to you wont they ?? Oh and I havent even mentioned your qualifications (same as mine I think) that will make an even bigger difference wont it.

    Peter my old sausage – just get on doing what you do – time will tell whos right and whos wrong like I said, if your right you can come back and tell everybody how clever you are !!!

  56. @ Peter Herd

    RDR has taken a system where advisers were easily able to prospect for new clients and turned it into one where cost is the most important aspect and value has been subsumed.

    RDR will lead consumers to believe that the more alphabets you have behind your name then the better you must be.

    The RDR has rid the industry of thousands of competent client-servicing advisers who will never be replaced.

    The RDR will confuse consumers who cannot understand by commission is available on some but not all products.

    The RDR will further confuse consumers who will not understand the difference between an IFA, whole of market advisers, niche specialist adviser let alone the woeful assemblage of chartered, certifed and other grandiose monikers that have avalanched in recent years.

    More to the point, what the hell difference is it to you how I run my business? Get on with servicing your own clients and leave others to do the same.

  57. Alan

    There are only three things the consumer needs to know under RDR and for once I would agree with you that the woeful assemblage of names used by different institutes is causing a problem e.g. chartered financial planner, professional financial adviser and even the old independent financial adviser.

    1: So the first thing that the FSA need to promote the fact that adviser giving advice on investments and pensions should hold a current SPS certificate. What the adviser calls themselves after that is up to them.

    2: The next thing clarify is the differential between restricted and independent.

    My understanding is that a restricted adviser is somebody who has chosen to give advice from a restricted panel of products or funds.

    An independent financial adviser is somebody who has chosen to give advice from the whole of the market.

    A specialist adviser can be either restricted or independent depending on whether they give advice from the whole of the market or restricted products within their chosen specialism.

    3: What is the fee and what does it cover:

    Initial advice, Reviews, Switching instructions etc.

  58. Peter Herd

    With so many ganging up on poor old Peter I thought I’d bung in my tuppence worth.
    Peter, you are not alone. I see these comments and they all seem to come from the same old … same old. Unimaginative, hidebound, resistant to change and certainly not entrepreneurial. Probably people who have always been in financial services and nowhere else, many of whom started with a life office – that alone explains a lot! (For those who know my opinion of life offices!)
    I do concede that the RDR is a proverbial pain, it is severely flawed in many ways and that the regulator is staffed by less than original thinkers. But be that as it may, we have what we have and those who can work with or round it will do OK (not fantastically, but OK). Those who continually moan and refuse to engage might well eventually see the light. Probably like getting into a cold sea – after a few minutes you get numb and don’t notice it!
    Those that don’t – well I hope you have managed to accumulate decent pensions and investments.
    The only way things will change is with an act of Parliament – and how likely is that? Labour created this monster and the Tories with their lap dog Lib Dems have nurtured it. We just have to live with it.
    If things were so hunky dory before, how come disclosure always appeared on page 29 of 30? How come we all sat still while the big distributors drove commission rates up through the roof? (Was it 7% on bonds?) How come trail and renewal commission so often slipped under the net? Look at the huge rates of commission paid on life assurance. We too were not perfect and our mistake was in not cleaning up our own act before the behemoth decided to intervene. So now we have to shovel the manure. The pessimists will moan that they are in the shit, the optimists will realise that they will be able to grow some pretty good roses.

  59. To Harry Katz

    Thanks 😉

  60. Commission in essence is the product providers way of rewarding a 3rd party for doing the marketing for them. Of course it is open to abuse, but then so are fees. Look at shows such as Rip-off Britain and you’ll see evidence of all trades and professions abusing the way they get paid. Will it really be easier to expose an advisor who is overcharging?
    Basic economies of scale will also put larger brokerages at an advantage over a one man band. What deals do you think providers will make to encourage advisors to place business with them? They are certainly not going to just sit back and wait for it to come to them. If they go to the trouble of marketing their own products, why bother with a middle man at all?
    Some who make the effort will do very well from the changes, and who can begrudge reward for efforts. But other than more transparency for clients on charges, I see more negatives than positives from the current setup of RDR.
    It’s an overstep in the right direction in my opinion.

  61. Harry Katz | 11 Oct 2012 5:45 pm

    Having worked in home service, direct sales and bank assurance, and for the last 10 years as an IFA, previously to that in retail and manufacturing sales, in the position of both adviser and in senior management I think I can safely say my experience thus far tells me RDR is just another nail in the proverbial coffin. I’ve been listening to people like you for 30 years telling me how I’m going to be more professional, how I should operate and how each initiative was going to make me a better adviser and offer much better value to my clients. I listened to the FSA telling me that TCF was the way to go when in reality I’ve been treating my clients fairly since starting in this industry, or I dare suggest I wouldn’t have lasted as long? RDR on the face of it with its better qualified advisers is laudable but at what cost to me, you and the people we serve? I’ve come across many a Chartered Financial Planner that doesn’t have a clue about retail mortgages, life assurance or products such as equity release yet their higher qualifications are supposed to set them apart from the likes of me. You know what? My 30 years of dealing with this stuff on a daily basis actually means I forgotten more than some of these people know. I’m not saying these people are bad advisers or what they do know benefits their clients I’m just saying their higher qualifications mean nothing in the grand scheme of things. RDR will be seen in 2 or 3 years’ time as a massive mistake to be replace by something just as bad. This unfortunately is the nature of the beast and as long as you have a very well paid regulator they’ll always make sure they have something to regulate.
    By the way Optimism is a mental attitude or world view that interprets situations and events as being best (optimized), meaning that in some way for factors that may not be fully comprehended, the present moment is in an optimum state. Just because you believe you’ll be growing roses it doesn’t actually mean you will. You might actually drown in all the shit? That’s called risk assessment.

  62. The problem with fees is that most clients, especially those who are Schedule E employees, don’t understand the costs of running a small business. They also don’t know how much we have to hand over to regulators, PI insurers, networks handling our compliance etc etc Those same clients receive holiday pay, sick pay and, perhaps, a pension and many get paid whether they actually do anything useful or not – the old 20:80 rule applies to employees in many large organizations, 20% of the workforce does 80% of the work whilst the rest sit around on their lazy arses. As an IFA, if you don’t work then you don’t get paid.

    So, when an IFA wants to charge a decent rate for the job, a job that can often make a huge difference to a client’s financial world, the client often looks aghast.

    All that said, my personal view is that anyone entrusted to look after some else’s financial affairs should be qualified to Chartered level. The post-RDR diploma qualification allows people with the equivalent of 5 GCSEs at ‘C’ grade (sometimes with minimum experience) to advise their clients on matters with, potentially, the farthest reaching consequences. That can’t be right.

  63. Only ONE pig’s ear?

  64. TOO LITTLE TOO LATE – the die is already cast and the damage done. The simple fact is that the new system post-RDR provides independent advice for the rich only! The vast majority of the public will not pay fees and will have to deal directly with the banks, who are the real beneficiaries of this farce. Incredibly they are being rewarded for their part in the current recession!!! Once the ‘no commission’ formula has been introduced to mortgages and insurance products then the industry as a whole will be dead. RIP independent financial advice!

  65. I agree with Doug (3:07pm) RDR is a victory for the banks, and the net effect of RDR will be that the public receive less not more independent advice! Fortunately my client base is made up of 90 high net worth clients, so I will survive as I don’t need to look for new business and can be as smug as Peter Herd! However, I recognise that the vast majority of advisers out their have been providing a valuable service to the general public, not the top 5-10%. How much do you think the average person will pay you to set-up an ISA, or advise them on where to invest their pension money? £100? £500? £1,000? The fact is the vast majority will pay ZERO, because they don’t see the benefit of taking advice. They will jump onto the Internet and/or go directly the banks. Who is going to educate the public, and persuade them of the virtues of taking financial advice? The regulator? The dwindling number of advisers? The effect of RDR will be the same as the effect of stakeholder. Less people will save, fewer people will speak to an adviser about a mortgage or insurance and be persuaded to save, so we’ll be left with an even bigger pension black hole in the future! The new two tier system doesn’t effect me (thankfully!), but I have a heart and can see the damage it will do to the majority of advisers and the public in general.

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