This year has shown us how much can happen in a short space of time as some of the major developments for our sector have unfolded in as little as a day.
Conversation over dinner was dominated by talk of the collapse and nationalisation of not one but two UK banks, the forced merger of two more and the Government bank bailout to the tune of £37bn of public money.
We have seen the capitalist system shaken by the loss of confidence in and between banks and investors. On the other side of the pond, four of Wall Street’s biggest names have disappeared and mortgage giants Fannie Mae and Freddie Mac were taken into US government conservatorship.
November has been yet more eventful. We have witnessed the conclusion of America’s most spectacular presidential election campaign in living memory and the Bank of England cut interest rates to the lowest we have seen since 1955. On top of that, we have had the Competition Commission’s provisional decision on remedies for PPI.
It is a cliche but it is true to say that the only certainty we have in the financial world is uncertainty. No one really knows when this turbulent period will end despite a barrage of analysis, some useful and some less so. What we can be certain of is that few businesses will emerge unscathed. We continue to hear daily news of downsizing and redundancies.
One topic for many at the Aifa dinner was whether we will see a rise in complaints. In hard times, human nature prompts people to look for a scapegoat and complaints are not always genuine. Sadly, being the subject of an unfounded complaint does not guarantee an adviser will escape costs. Regulatory and case fees are a huge burden for our members and never more so than in this period of economic gloom.
That is why we are in talks with the Ombudsman over case fees and the FSA over regulatory fees and dividends for our members. As we have consistently pointed out, the intermediary community represents the lowest burden on the regulator and Ombudsman, with the lowest level of intervention and complaints.
With the threat of increased complaints and the resultant burden on our members in mind, we are in negotiation for the provision of an increase in free cases to five and a minimal increase in levies.
For a small business, the effect of increased fees proposed by the FSA to pay for this year’s financial woes is a significant cost. Aifa believes in the “user pays” principle – something the new FSA chairman appears to agree with.
In fact, Adair Turner is on record as saying that our profession has paid out too much for too long while bigger institutions have escaped costs. And we stand firm on our statement that lower fees should be granted to those who pose the lowest risk.
Our members have not been responsible for bringing the economy to its knees or for the fall of some of the biggest institutions. It is wrong that they should be penalised – a sentiment that was echoed by many who attended our dinner.
We are working hard to ensure that the bills that our members receive next year are a just reflection of the state of affairs.
Tracy Elwick is PR director at Aifa