Sesame’s chief executive Patrick Gale has made a clarion call for advisers to professionalise.
He believes the financial services industry has a unique opportunity to benefit from principle-based regulation.
He is also upbeat about where IFAs and standards of advice are at the moment, believing that many of the problems of the past will not be repeated because of better standards of advice, disclosure and documentation. But he says advisers must go further.
If they succeed, the benefits will include less onerous regulation but he says, more importantly, there should be no more damaging hits to consumer confidence from the FSA needing to take action.
His ideas involve more training but he also points to action that Sesame has taken on income drawdown where it licensed permission.
Despite initial member protests, he says Sesame members doing drawdown have raised their game and are doing better quality business and making more money as a result.
There is little to fault in what Gale says and he may be saying it at just the right time.
The FSA has made much of its move to principle-based regulation but we sense that it has paused for thought when it comes to the retail market. The advice market and big groups such as Sesame will need to do some convincing.
Indeed, Money Marketing still needs convincing. A move to principle-based regulation should not involve simply leaving advisers in the dark, only to face the wrath of the FSA at a later date.
But by and large, the FSA moving to this basis should be good news.
So Gale’s call makes sense – a professional advice industry is more likely to be one that is left alone to better advise clients and run their businesses without regulatory interference.
Of course, Gale is not talking about commission structures or any possible fees.
He is talking about standards of advice and standards of qualifications plus a more professional approach to running advice businesses.
We support his call but we still need a debate about what exactly professionalism means.