Like the vast majority of advisers, I am not loving it, “it” being Mark Hoban’s humourless and rather pathetic performance at last week’s RDR debate at Westminster Hall.
Many bloggers have likened him to the McDonald’s clown whereas others have been unkind. I, on the other hand, intend steering clear of political jokes and promise not to mention him any more.
The events of the last week have given encouragement to the bulk of the adviser population that believe the RDR is not fit for purpose. The Treasury select committee and numerous MPs have seen the flaws in the theories and have been astonished at the almost unbelievable £1.7bn cost which ultimately will be passed back to consumers.
Many advisers had almost given up, in the belief that you cannot fight the Treasury which, incidentally, seems not to have noticed the change of Government. The recent intervention by informed Parliamentarians attested that if you persist and focus the harsh and unforgiving light of truth on these webs of theory and intolerance, you end up with an informed choice.
Questions are being asked of the Association of Independent Financial Advisers, supposedly the pre-eminent trade body. It was not too long ago that Chris Cummings angered advisers by warning them off canvassing MPs. Leave it to the professionals, was the gist of his message. Just as well we did not heed this advice.
Not only were the MPs outraged at the forecast £1.7bn cost but they also marvelled at how it had multiplied threefold in two years. On this basis, it could be approaching £5bn by now.
Lest we forget, in June 2009, Oxera prepared a report for the regulator entitled, RDR proposals: Impact on Market Structure and Competition. Within its pages were unbridled comments which the FSA conveniently ignored when piecing together its disastrous proposals.
Here is a snippet for your edification: “There is percep-tion that both product and provider bias has existed in the past although the actual evidence to support this perception has often been hard to identify.” And another: “There is a growing concern that there are not enough young advisers entering the industry. This concern is borne out by the current lack of young advisers – in March 2009, only 3.7 per cent of advisers were under the age of 30”. Finally, this little gem: “Consumers may view advisers working within the bancass-urance model as cheaper than independent advisers.”
RDR naysayers are often accused of being Luddites, failing to smell the coffee and other hackneyed phrases. However, the Oxera report was commissioned by the FSA and it is noticeable how these concerns fall on stony ground whereas comments regarding misselling and that old Treasury favourite, asymmetry of information, are hauled out to reinforce the pre-ordained direction.
The bulk of the MP population is oblivious to the chicanery and deviousness that has pushed these kamikaze plans forward. I will work to ensure that they receive the hard evidence and not just the spin. Maybe the tide is turning.
Alan Lakey is partner at Highclere Financial Services