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Online comments from last week

Frankly this is a reminder of existing FSA guidance. I think that the FSA are quite right to draw attention to this as chastising bank advisers may be a bit of a case of “splinter and log” eye syndrome.

We have had ages to prepare for RDR and everyone should be aware that this is not simply about turning commission off and fees on. It is a fundamental gear shift towards a proper profession. This means that heads of businesses should have been thinking and altering their business model. Advisers that are working under the oversight of others should also be taking responsibility for their own careers and reflecting on how they wish to advise from 2013.

Running a practice, whatever its size needs to have a sustainable model, where costs are properly identified and a profit is earned (which is the only way to be sustainable) delivering a service to clients. The price and service are merely a matter of logical and fair assessments of the client base and removes as far as possible any hint of bias towards providers or products.

Advice always needs to be justified and in a firm with a good model, I can only think that the main possible conflict of interest is whether to invest or repay debt, which is then presumably justified on a case by case basis, but presumably the weight of proof would need to be significantly greater for those advising investment rather than debt elimination. This potential conflict can only really be completely removed by not being remunerated to implement or manage funds, which is a very rare position to be in.

All that said, frankly abuse of commission and IFA incentives don’t really compare when you consider the mess that banks (retail and investment) have made.

Dominic Thomas

Online comments relating to article: Rob Reid: Is Standard’s trail move the shape of things to come?

From next year the traditional relationship between intermediary and product provider will end, and whilst it is positive for the adviser, the negative impact it will have on many providers new business flows will lead to more of this behaviour. The desire to get closer to the end customers is not a new thing for product providers, the RDR and the legacy agency agreements that exist with intermediaries, will help them get that bit closer.

Anthony Morrow

For some time now we “nominally” offset trail we receive against a client’s invoice. Any provider which turns off trail will in effect be taking income directly from our clients. We will make sure that the client is well aware of what is happening and thus providers will lose a reputation that has taken years to earn.

Sam Caunt

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Comments

There is one comment at the moment, we would love to hear your opinion too.

  1. Most investors especially very small retailer do need some sort of loan to get off ground. The question of should they repay their loads or invest their profits back into their business is part of the business calculation every investor has to make.

    My guiding principles in making such a choice is the ratio of profit earned with such loan, to the interest accruing on the loan

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