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McFall calls for FCA regard over access to advice

Former Treasury select committee chair Lord McFall has tabled an amendment to the Financial Services Bill that would require the Financial Conduct Authority to have regard to how easily consumers can access financial advice.

In the new regulatory regime, the FCA will have a strategic objective of ensuring that financial markets and the market for regulated financial services “function well”.

It will also have three operational objectives of “protecting and enhancing the integrity of the UK financial system”, “securing an appropriate degree of protection for consumers” and “promoting effective competition in the interests of consumers”.

Under its competition objective, the FCA must have regard to what consumers need to make informed choices and the ease with which they can switch providers.

Labour peer McFall wants this amended so the regulator must also have regard to consumers’ “ability to easily access financial advice”.

As the bill passed through the House of Commons, the Government refused to back a single Labour amendment.

Lansons director of regulatory consulting Richard Hobbs says the amendment would not affect the RDR but the regulator would be under more pressure to deliver effective solutions to the resulting advice gap.

He says: “It would put pressure on the Money Advice Service to improve and the FSA to finally deliver on simplified products and advice.”

An FSA spokeswoman says: “Original forecasts that the RDR would cause a big drop-off in advisers seem not to be materialising, so we are not concerned in that area.”

Lord McFall was unavailable for comment.

Baronworth Investment and Financials director Colin Jackson says: “This would be very welcome because many people are not going to be able to afford advice after the RDR.

“The question is, can they make advice affordable for clients and profitable for the IFA?”

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Comments

There are 15 comments at the moment, we would love to hear your opinion too.

  1. An FSA spokeswoman says: “Original forecasts that the RDR would cause a big drop-off in advisers seem not to be materialising, so we are not concerned in that area.”
    It’s not that I don’t ‘trust the FSA’ but I would like a breakdown of the adviser numbers over each of the past 5 years and the current number RDR ready. This would give an indication of the ‘Drop off’ and what the FSA consider to be big numbers.

  2. A good idea Mr McFall but I doubt they will listen or Mr Mark Hoban and the FSA will take any notice as they have proven so many times before.

    It seems crazy to me that we all know we have major problems with financial regulation and indeed many areas of the financial services industry but those responsible for putting things right are so set in their ideas (they know what is right), but refuse to listen to anyone else at all who have perfectly reasonable concerns. Mr Hoban and the FSA have demonstrated this so well in the past by refusing to answer legitimate questions and concerns even from their fellow deomcratically elected MP’s.

    I cannot see any sensible progress being made until these sort of people are removed from the decision process in trying to get a sensible solution to our problems.

    Sir Merwyn King has himself admitted this morning that financial regulation cannot stop mistakes being made and that thr whole culture and rewards system needs to change, but when the communication and discussions are invariably one way only (they tell us) it will be hard to get it right.

  3. How ironic that its always labour standing up for IFA’s during the financial services bill discussion when many IFAs are the most right wing people ive ever met!

  4. An FSA spokeswoman says: “Original forecasts that the RDR would cause a big drop-off in advisers seem not to be materialising, so we are not concerned in that area.”

    Very clever wording – notice how they have avoided using the term independent financial advisers!

  5. Labour peer McFall wants this amended so the regulator must also have regard to consumers’ “ability to easily access financial advice”.

    No problem – anyone will still be able to “easily access” advice – just that the majority won’t be able and/or willing to afford it.

  6. @ Sean,

    Why would they use that term, the public have a right to choose whether their advice is independant or restricted so i hardly see how a lack of not considering using the term “IFA” has any impact or bearing really!

  7. If the RDR was adout the ability of people to have access to Independent Financial advice at a fair cost I would be all in favour.
    What has happened is totally different and now the consumer has been overlooked and will not even be considered.
    There will be very few IFA’s left after RDR, can’t anyone in power see this is so morally wrong or is it that a lot of their high powered mates will make a lot of money out of this at the publics expense.
    I remain frustrated.

  8. Lies and more lies IFA’s are disapearing and will become as rare as Rocking Horse Sh** for the majority iof the public.
    This is planned not an accident!

  9. To – harry sinclair – I do not wish to criticise your remarks, they are obviously deeply felt, but I am not nor ever will be described as Right Wing (whatever that means) Most of the IFAs I have been privileged to be associated with are ordinary people, with varied backgrounds and I have not yet met anyone with extremist views as could be appended to the term Right Wing.

    My personal background is from an ordinary working family, no university education but some years in HMForces before returning to civvy street in the early 70’s and joining this industry in 1980.

    Just ordinary people doing an extra ordinary job is how most IFAs perceive themselves, those who think they are an elite, deceive themselves, the real issues of the day is that everyone at present has access to Independent Financial Advice or can choose to go with one provider or the restricted route, it is not about access, it is about cost and the costs of being an RI or firm are so out of line with reality and ever increasing with burdens from the FSCS added on top of them, that ordinary working families will be unable to afford us, because we have to spend so much time jumping through the hoops and traps of such draconian regulation, we have very little time left to do what we do best, advise and implement financial planning.

  10. Nickobobinus

    The original surveys were based on IFA’s leaving the industry.

  11. Well said Ned,
    Harry I dont know who you talk to mate but Right Wing advisers, what rubbish.
    Most of us are here to help Joe and Joanne Public to get the best we can find at a reasonable cost.
    We are by and large a very middle of the road crew.

  12. An FSA spokeswoman says: “Original forecasts that the RDR would cause a big drop-off in advisers seem not to be materialising, so we are not concerned in that area.”
    Materialise-come into existence or view.
    The FSA has always been blinkered and in their view they are not concerned.
    Of course not because the FSA will be blamed and they will still have a job in a different guise.

  13. Funny how the spokespeople giving (what is probably) misinformation or downright lies never want to give their names.

  14. Lord McFall, and when you were in power you did what?

  15. Julian Stevens 3rd July 2012 at 5:20 pm

    Whether or not the RDR will be the cause of a big drop off in adviser numbers is decidedly debatable, not least because the day on which the FSA intends to push its Big Red Button has yet to arrive. That aside, there are plenty of other things on which the FSA is busily at work which, on top of the RDR, will force many advisers out of the business:-

    1. The costs and claims excesses and exclusions of PI Insurance (for those who can still get it at all),

    2. Endlessly escalating regulatory levies,

    3. The FSA’s obdurate denial of the protection of any longstop against stale complaints,

    4. The FSA’s continuing programme of hindsight reviews,

    5. The back-breaking tonnage of red tape necessary to make any transaction compliant,

    6. A rule book so vast and so labrynthine that it’s virtually impossible to comply with,

    7. The ever-increasing costs of providing quality advice, at which more and more clients are baulking,

    8. The general stress and grief of it all.

    There are more, of course, but the picture’s pretty clear and, when NEST comes in, there’ll be a simply dire shortage of advisers willing to bother trying to advise the hundreds of thousands of SME’s who’ll be completely at sea with their obligations.

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