There are two cafes here in Sagar Street, Castleford, where we have our office, The Blue Cup and Maureen’s.
Both have been going since the 1960s and both allowed smoking until the introduction of the smoking ban.
Before the ban I asked both owners why they allowed it when most customers, me especially, didn’t enjoy mixed mouthfuls of smoke and food. Both worried that if they banned it first their smoker customers would go to the other. The smoking ban levelled the playing field. Now we all eat smoke free and neither business has lost out to the other.
The FCA recently completed its suitability review. It alleges, in relation to fees, that “41.7 per cent of the sector provides unacceptable levels of disclosure.”
Presumably that 41.7 per cent didn’t include the FCA’s sweetheart St James’ Place whose directors, according to Tony Mudd, sat down with the FSA a year before RDR to agree how its ‘unique’ pricing could work.
It obviously works for them as I still come across clients who think SJP is independent and that it gives free advice. If Andrew Bailey wants to come to Castleford to agree our unique structure I’ll make sure we have the kettle on.
Marking our homework
We were not amongst the firms asked to submit files for review. Having developed an at-retirement process which I think is pretty good however, I wanted the regulator’s take on it.
An FCA contact of mine kindly agreed I could submit a file. I do not have a problem engaging with the FCA. I’ve always found its people intelligent, fair, genuine, professional and helpful. Even when I disagree with them.
After some clarification our advice was deemed suitable but our disclosure unacceptable. That despite us giving every client a firm all-in price in advance before they commit to anything. So we are apparently part of the 41.7 per cent
Do I feel bad about that? Not in the slightest. Sure, I’ll tweak our documents to comply, but if anyone seriously thinks we in any way mislead clients or disguise what we charge then he or she is barking.
Breaking down the numbers
We met the client in the specimen case on 14 June last year. It was complex, involving different pension types with funds totalling £167,000. We priced the job at £1200 and issued a client agreement by post 21 June which the client agreed 13 September. We got him benefits far in excess of his expectations and he was delighted. Not the FCA.
Our client agreement separates advice and implementation costs and is fully itemised. The FCA says it does not make clear the fact that we charge for implementation. I completely disagree and we’ll continue to argue about it, but this could all be solved by a level playing field on disclosure standards – method, format and timing – covering all the players in the market.
A smoke-and-mirrors ban to work like the café smoking ban, covering vertically integrated firms and comparison sites along with advisers. And please, no more sweetheart deals that give some an unfair advantage.
Has this put me off engaging with the FCA? Not at all. Some will sneer and say it serves me right for sticking my head in the lion’s mouth but hey, I’m a biker and used to living dangerously.