View more on these topics

Mick McAteer: High charges have done more damage than misselling

mcateer.jpg

The Financial Inclusion Centre director Mick McAteer has argued the consumer detriment caused by high charges “far outstrips” the estimated £30bn consumer detriment caused by misselling.

At a Money Marketing and Cofunds live RDR TV debate yesterday, McAteer, who was previously principal policy adviser at Which?, said he hoped the RDR would see advisers promote the benefits of financial advice and drive value for clients by pushing for lower investment costs.

He said: “Think about the consumer detriment we have seen over the past two decades. I reckon there has been about £30bn worth of detriment associated with misselling costs, pensions, endowments, payment protection insurance. That works out at £1.5bn a year over the past two decades.

“I am willing to bet the consumer detriment associated with high charges, value destruction, and waste and inefficiency in the financial services supply chain far outstrips that. There is a great expectation for the adviser community to drive competition and efficiency through the supply chain. That will deliver more value for consumers than stamping out misselling.”

McAteer, who is also non-executive FSA board member, added he wanted advisers to tackle the “fundamental importance” of the impact of long-term charges on investments, and “stand up and address” the issue of underperfoming funds.

Click here to watch the debate

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There are 10 comments at the moment, we would love to hear your opinion too.

  1. “I am willing to bet the consumer detriment associated with high charges” – so he has no actual evidence to back up this statement then.

    As for adviser charging all it will do is allow fund managers and product providers to keep a larges slice of the annual management charges.

  2. I’d agree with the previous comment. We’ve just been notified by one fund manager about their shares classes post RDR and the one for clients with less than £50k still charges an AMC of 1.5% per annum, but doesn’t pay us any trail so we’d have to charge the client on top.

    How does this benefit anyone, other than the fund management group?

    Of course, if we use a platform we’d be able to access less expensive share classes and the client would still be better off, even after the platform costs – so that’s what we will do!

  3. The industry should grow some, this is not a charitable exercise. Expertise and time costs money and the value will be in the outcome. Don’t like it? Well there’s always a post office savings account.

  4. “waste and inefficiency in the financial services supply chain far outstrips that”

    Tell me about it Mike.

    Not sure how our clients are going to take to “sorry sir that will be an extra £…… on your bill because getting information that we need efficiently from your ………….. is virtually impossible!

    I guess the one advantage now that the client is invoiced we will be able to tell them to reclaim from the institution to blame.

    Prime example, friend had a complaint with Santander. They sorted it after 6 months and sent her £60 for inconvenience’. They were so apologetic that they forgot to enclose the cheque.

    Pay peanuts!!!

  5. @Mervyn King
    Exactly. How much does Mick McAteer earn?

  6. The problem with being a career idiot is that there is no shortage of opportunities to move into new positions – such as the FSA panel.

    Similarly, those whose main problem in life is in keeping their mouthes shut, should take a lesson from Harry Katz and quietly step aside.

  7. Excuse the language but what absolute b*llocks.

    Here we go again thinking that a charge is the measure for customer satisfaction.

    Why the hell is mis-selling being played down or defended.

    This bloke is a complete idiot.

  8. We could do with re-running history, and this time round taxpayers don’t bail-out the banks. Instead, the banks collapse, and the compensation scheme kicks in, and anyone with savings above £35,000 lose every penny above £35,000. We will then find that this leaps to the top of the league table for consumer detriment. Don’t people have short memories?

  9. What does this sweaty, beer-swilling Irish tosser know about anything anyway? He’s all opinion and no facts.

  10. I think what he is really saying is get rid of the Regulator – miss-selling will continue but without regulation to pay for we can reduce our charges substantially. Or have I missed something ??

Leave a comment