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Not enough advice to go around

The latest round of pressure on the intermediary market, including the potential abolition of indemnified commissions, is likely to result in a significant reduction in the adviser population.

And yet the need for advice is greater than ever… . .

One of the most complex tax systems in the world

During Gordon Brown’s Chancellorship alone and in the 10 year period up until 2006 the volume of tax legislation more than doubled, from 3,700 to 8,300 pages and no-one can read all of it.

Telegraph 8/11/2006

The most complex pension system in the world

It’s been estimated that for each and every week that has passed since the introduction of the State Pension scheme by Lloyd George in the early 1900’s, a new piece of pension legislation has been introduced.

Is the outlook gloomy for the 40 million + adult consumers given the reduced access to independent advice?,

The intermediary market is amongst the most resilient having weathered some 20+ years of near continuous Financial Services legislation changes. The means by which products are distributed has already altered significantly with some interesting new entrants into this territory including the recent addition of Argos who have followed other retail giants such as Tesco.

The ‘Supermarkets / Aggregators’ have seen prolific growth generally underpinned by a commercial principle of creating huge website traffic and selling the resultants sales leads for fulfilment elsewhere.

A wise man recently said to me …

“Do these brands now aspire to ‘own a customer journey’ rather than ‘sell a lead’ ?”

Which?’s consumer group survey lends a new slant on this interesting group of marketeers

Only three in ten said they trusted them to find the best price available, while two thirds believed they would be presented with the products that make the websites the most commission.

Over 12 per cent said that they were unhappy with the quotes they were given and even after searching for products on comparison sites, more than half said they brought the product directly from the provider.

A quarter of the people surveyed said that they did not eventually buy through a comparison site because they found a cheaper quote elsewhere.

Source: This is Money – 18 November 2009

The Nationwide Building Society introduced the UK’s first internet banking service on May 27, 1997 with subsequent usage of these type of systems exploding.

Consumers now demand service and as such the online battle is likely to take on a new life in the coming months and years .

Paul Holland is former non-executive chairman of Capita Financial Software and founder of


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There are 11 comments at the moment, we would love to hear your opinion too.

  1. mortgagemicroscope 23rd November 2009 at 10:47 am

    Does this wheel keep on spinning. Everything has changed and yet nothing really has…the public generally likes to take advice in some fashion (it could be information, guidance, recommendation etc ) from a qualified and experienced expert in that field. This was the same 10, 20 and 30 years ago !!

  2. Would echo Evan Owen’s comments – that it is rather sad …

    SAD that Tesco/Sainsbury/ASDA/etc al will simple replace the (largely) uber-cr*p service people get from the banks (and yes, I’ve seen this over many years)

    SAD that it will be product driven, as opposed to holistic planning – which is what many people need

    SAD that the vast majority of the public in the UK are either:

    a. thick/stupid
    b. gullible
    c. apathetic
    d. combination of elements/all of the above

    … and so this ‘mass-market’ advice will be rolled in without much of a murmur

    SAD that many people can tell you where the cheapest beer/petrol can be found, but cannot tell you how much they put into their pensions each month … and what they’ve got their monies invested in

    SAD that peeople will haggle over the purchase price of their car (or will take forever to find an extra 0.5% on their sad little savings accounts) yet mention paying a monthly fee to sort out their investments/pensions/protection/tax planning and they run a mile …

    SAD that no-one (esp HM Gov) wants to try and educate people in a financiall sense

    SAD that eventually the undervalued, hard-working IFA will eventually be working for a large national … a bank or a supermarket (cheers, FSA!!!)

    Bitter, me … … No … …

    Hey ho … …

  3. After the FSA gets through ramming its RDR down the industry’s already choking gullet, there’ll be even less independent advice to go round via any channel.

    First thing we need is a new FSMA as the basis for root and branch reform of the FSA, followed by equally root and branch reform of the tax framework by which pensions are governed (chuck all this garbage about personal accounts down the drain where it belongs).

    The mess this government and the FSA between them are making of the country’s economy and savings culture are truly awesome. We pray for change.

  4. It is disappointing to see these days that so many people and companies out there know the price of everything and the value of nothing. The internet provides everyone, whether qualified or not, to access a huge amount of information and to form an opinion but the true meaning of advice is being lost. Advice is the application of knowledge to suit an individuals needs and circumstances and take responsibility for that advice – if that is forgotten they it will be a sad and confusing world !

  5. The brave and the good intermediaries will survive. The ones selling products for commission and their own benefit will not. The ones who believe advice means moving granny’s money out of the building society into a bond because of commission will not.
    Advice for the customer needs to be paid for by the customer then the intermediary will act properly and not be tempted. Of course this will change the shape of the industry but that’s no bad thing.
    A brand new market for advice, guidance and information will develop and innovative entrepeneurs will make money out of this, then we will have an overhauled intermediary sector within this new market.
    It’s all good news for the consumer and good news for those that can adapt

  6. Despite being one of the brave and the good (IMHO) and working as Keith Thomson has said above, my wife and I came to the conclusion over the weekend enough is enough, despite the fact my business is profitable and my complaints record is excellent. I have just had enough of the whole financial advice game and the increased threats in every speech from the FSA. As friends of mine said on Friday night, “they are not aimed at you and nor are the FSA’s rules”, I’ve just had enough of them and they can get stuffed as I’ll leave well before 2013 now despite the fact I could have been advising clients for another 20 or more years…..
    Enjoy the extra space guys and gals…..

  7. The banks have demonstrated that customers are not treated to the same standards that clients receive from IFA’s. Why should Tesco’s and Agros be any different?

    Graham Bond
    Consilium Asset Management

  8. Caroline Anderson 24th November 2009 at 11:08 am

    When we have a nation of people who no longer save for a rainy day or want to provide for their retirement why are the FSA so hell bent on getting rid of financial advisers who have a huge impact on advising client’s to plan for their future, why impose such rigid rules on how IFA’s are paid! surely the public should have a choice?

  9. As a Labour supporter for over 30 years I never thought I’d say this, but the Tory’s will get my vote at the next election for the simple fact that they’ve pledged to get rid of the FSA! This organisation is systematically destroying the concept of advice, and some of the naive comments I have read on here support this march to oblivion. If the public are asked to pay for advice upfront in the form of an hourly rate, like any accountant or solicitor, they will simply choose not to take advice and will run blindly into the hands of the banks and now the supermarkets!! The government keeps harping on about the pension crisis in the UK, then backs the FSA who wish to eradicate those who are encouraging people to save for retirement. I’m afraid I tend to agree with one of the former comments that says enough is enough. I think early retirement from this industry is probably the best bet. At least I have a pension!!

  10. I have no doubt that the better off will do much better paying a clearly defined sum directly for their advice on investments rather than having this shrouded in commission deductions.

    However I believe that many people who have little to invest recieved a subsidy from these investors paying large commissions in that their IFAs recovered little from their poorest clients.

    Financial Advice, just like the law and the Ritz, is open to all. Who will pay for the financial advice the poor need but will not or cannot pay for ?
    It is the Country and the Taxpayer who need the poorer members of society to be properly advised as it will be the taxpayer who has to pick up the tab for the poor being a charge on the State. Can this be done by the Bankassurers or over the Internet; or will the Country as a whole suffer from the poor no longer being properly advised ?

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