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MPs want IFA evidence in RDR probe

Treasury select committee members have urged IFAs to write to them with evidence following news that the committee is to consult on the impact of the retail distribution review.

Last week, FSA chief executive Hector Sants told the committee that the RDR was intended to deliver a transparent and fairer charging system, a better qualification framework for advisers and greater clarity on the type of advice being offered.

The TSC is calling for written evidence on whether the RDR will achieve these outcomes and whether they could be achieved in other, potentially better, ways.

Committee member and Conservative MP Harriett Baldwin says: ” I am very pleased that the committee has chosen to take this important step towards properly investigating the impact of the RDR on independent financial advisers. I would urge the hundreds of IFAs who have written to me on this subject to submit their thoughts to the committee.”

TSC member and Labour MP Andy Love says: “We are going to have a brief session on the RDR because the concerns have been raised at committee were loud enough to look at this in more detail. I think that is right and proper and I am pleased there will be a debate in the house because that again is a reflection of the level of concern out there.”

The committee says at present it is not conducting a full inquiry and no one will formally give oral evidence. The closing date for written evidence is January 17.

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  1. We can be fairly certain that there’ll be a wealth of submissions to the TSC on this hot and rancourous topic, about which large swathes of the IFA community feel rightly aggrieved.

    Just one of the problems with the FSA is that its policy making team appears to be made up of absolutists, for whom there are no greys, only blacks and whites. Considerations such as commercial realities, collateral damage or whether or not the means justifies the ends appear not to feature in their thinking. So what if implementation of the RDR is going to cost an estimated £1.4 to £1.7Bn against an original estimate of £600m? Regardless of anyone else’s views, we still think it’ll be worth it, so stop moaning and just get on with it.

    All that matters to them is their relentless drive towards a Utopian world in which every financial planning strategy is perfectly flawless, beyond reproach and nothing ever goes wrong, nobody ever makes a mistake, honest or otherwise. It’s a worthy aspiration but ultimately doomed, because no matter how many regulatory strategies and initiatives the FSA dreams up, it all comes down to integrity and the knowledge of the proprietors of small businesses that if they don’t get it right, their business will fail or be struck off.

    Once again, where is the evidence that the modus operandi of most small IFA businesses is a broken model and in need of the sledgehammer “fix” of the RDR?

    We all know where the biggest systemic risks to good consumer outcomes lie, but the FSA remains resolutely oblivious to this and so continues doggedly to adhere to the same old mantras such as the need increase consumer confidence in advisers’ technical knowledge (lots of exams), fair and transparent charging structures (so commission must go) and all sorts of time consuming office procedures (such as TCF).

    And what do we have as a result of the FSA’s endless new initiatives? A record consumer savings gap, a near collapse of certain sectors of the banking system, a thoroughly reviled regulator and an unprecedented financial burden on those of us at the coalface simply trying to do our best by our clients and make a honest living. So much for what Crash Gordon described as “a world class regulator”. Somehow or other, sight of the wood has been lost amongst the trees. And all Hector Sants has to say is that we should be afraid, very afraid. We are, Mr Sants ~ afraid for our livelihoods.

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