Take the retail distribution review. We have all accepted with barely a whimper the assumption that fees are better for the consumer than commission. You only have to look at some of the double-charging, tongue-tied offerings from several of the bigger wealth man-agement firms to see that something slightly sordid is going on.
I have being doing this job for 24 years now and even I cannot understand some of the “fee propositions” wayward outfits are dreaming up. And it is not as if they are hidden in the small print – it’s on the web for all to see.
So you know where my cards lie, Thameside charges in any way a client likes by using all methods and embracing them fully. But have a look at the wording on certain websites for a clue as to where the big boys are going.
They are promoting their services for a fee, where plainly they are earning good old-fashioned commissions. As I have said before, it is just as easy to be a crook charging fees as it is commissions, so let’s resist the juggernaut moving us all to fees.
Why can’t I still deal with the smaller client or the one who is against up-front fees, who understands the life office interest-free loan to pay for his advice? The current system is not at fault but the people within it.
Talking of big boys, have a look at what our banks are up to. The current furore over NatWest’s MoneySense campaign is a classic example of the kind of fudging that is starting to emerge. The bank’s defence is that hardly anyone complained; I think you will find that is because hardly anyone understands.
Another example of the industry’s listless handling of our ever-changing playing field is the abolition of tax credits on pension funds.
When we all used illustrations before the tax was changed, we often used them to carefully target benefits, typically against other final salary schemes, or to calculate alternative benefits for staff moving to employers with no final salary arrangement.
So what of those calculations now? Each and every one has been rendered inaccurate, even without factoring in the current economic climate. And for those unfortunate enough to be snared up in the Pension Review, including professional indemnity insurers, they have paid dearly for this tax U-turn.
To restore faith in the system it must be given time to work. All this change reduces people’s confidence. So if you are brave enough, Mr Darling and team, ditch the Budget tinkering and restore our “simplified” regime. It was bedding in quite nicely, thank you.
Tom Kean is director of Thameside