I would say this is ‘too little too late’ but at least someone is saying it as it is. What really are the benefits of RDR for the majority of the population in the UK, as I’m personally struggling to understand why this has been allowed to develop along the lines it has?
Up skilling advisers knowledge is great, but the R0 exams I have taken recently have been promptly forgotten about the day after taking them. All I proved when passing these is I can memorise information a non-practitioner thinks I should know when it hasn’t been anyway relevant in what I do on a day to day basis for over 30 years.
Fantastic I’m now all clued up on Mifid which has been in force for four years now and is the cornerstone of the European Union’s regulation of financial markets. But seriously, what does the average man or woman in the street think of me having that wonderful piece of knowledge? In fact what do I personally think of me having that wonderful piece of knowledge? A pig’s ear indeed.
I predict that it will take 2 years before RDR is taken apart and rethought with some new kind of payment from provider to seller to market their product. It won’t be called commission but that is basically what it will be.
This will happen for two reasons. The first is the EU won’t ban commission so the UK will eventually step back into line. The second and more important reason is that there will be a slump in the amount of money invested in British companies through equity backed products. There will be no-one to advise, recommend and sell.
It will be a bit of a free for all as the entry requirements to financial services will need to be reduced as those who will be put out of business are unlikely to return.
Well done Mr Garnier. Yes you have got the publicity you thought this statement might produce.
But please tell me, if I were to do an audit, what exactly have you achieved by the speeches and pandering to a desperate audience only too willing to clutch at any straw? I see no definable or positive outcome and nor was there likely to be.
The only way would be a change in the law, altering the act to make the regulator more accountable and to rein in its powers and that is something that is most unlikely to take place. So all else is just posturing and hot air – exactly what we can always expect from all 650 MPs in Westminster.
Europe have said no to a commission ban. The FSA is not accountable to our Government but one thing they cant do is thumb their nose at Europe. Europe will not want the UK to have a unilateral ban as this will harm European advisers who have UK based clients. The UK must now seek permission from Europe to go ahead with the ban, I’m not sure they will get it.
So we had four years notice that the RDR was coming and now what everybody seems to want is further delays even though some of us have made the effort to become RDR compliant. I just wonder who’s going to pay the compensation if RDR doesn’t go ahead as I for one will be seeking compensation from the regulator for having to sit exams that are no longer giving me any benefit to differentiate myself from less qualified advisers who chose not to take exams instead they concentrated on writing business that’s probably going to end up in complaints that I have to pay for through higher FSCS levels.
The whole process may not be liked by the industry but for God’s sake something had to be done, because the industry was not prepared to come up with any coherent recommendations until it was forced to. That is a reality.
No doubt I will get more comments from people who just decided RDR would never happen. Even if it was to be amended, are you seriously thinking that change is not going to come to our industry with what has happened in the last 10 years?
The way the FSA is set up means it is not accountable to anybody except the Treasury who may get rid of board members. Keep at it Garnier, there is a chance here to do something and say something right.
The problem with fees is that most clients do not understand the costs of running a small business. They also do not know how much we have to hand over to regulators, PI insurers, networks handling our compliance etc etc.
Those same clients receive holiday pay, sick pay and, perhaps, a pension and many get paid whether they actually do anything useful or not. As an IFA, if you don’t work then you don’t get paid.
So, when an IFA wants to charge a decent rate for the job, a job that can often make a huge difference to a client’s financial world, the client often looks aghast.
All that said, my personal view is that anyone entrusted to look after some else’s financial affairs should be qualified to Chartered level. The post-RDR diploma qualification allows people with the equivalent of 5 GCSEs at ‘C’ grade (sometimes with minimum experience) to advise their clients on matters with, potentially, the farthest reaching consequences. That cannot be right.