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Providers push for clarity on the events advisers should pay for

Providers have held talks with the regulator to hammer out which types of events advisers must pay for under the FCA’s inducement rules.

The regulator’s final guidance on inducements, published in January, said providers can contribute to the cost of a conference or seminar organised by an adviser firm but the adviser must pay the majority of
the costs.

Speaking at the PIMS conference, owner and chief executive of the Financial network Charlie Palmer suggested that last week’s event could be the last PIMS conference after the FCA’s inducements crackdown. Palmer, also chief executive of IFA Compliance, said distributors have to pay 51 per cent of event costs where there is joint marketing, inc-luding training, seminars and corporate hospitality.

Following discussions with the regulator, the Association of British Insurers says advisers must pay the majority of costs for all conferences and seminars, not just those organised by an adviser. A spokeswoman says: “The ABI has regular meetings with the FCA, which have included us asking questions on inducement costs. The FCA has said costs of conferences and seminars should in the majority be paid for by advisers.

A spokesman for the FCA says: “We have been liaising closely with the industry since our review and now it is for firms to make sure any payments, hospitality or gifts are legitimate, are in consumers’ interest and that potential conflicts are well managed.”

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Comments

There are 13 comments at the moment, we would love to hear your opinion too.

  1. I don’t know about the rest of you but I feel a bit miffed at all this !!

    Yes I have enjoyed the odd corporate hospitality; gold cup, rugby the odd cricket match but have always seen this as more of a thank you, rather than buying in the business ?

    I do see were the regulator is coming from (kind of ) but is this more to do with the thousands spent on big networks and firms rather than taking me to watch a horse race with a few pints thrown in ?

    Same old story from the regulator I suppose; one suffers everyone suffers, maybe they also need to send out the right messages on their own events ? 15k for a board “meeting” at a top hotel and “SPA”

    And I may add reducing their personal tax liabilities by filtering pay through their own Ltd companies (allegedly)

  2. I trust that as a result of “Corporate Darwanism”, by David Cameron and his cronies – the destruction of advisers and their businesses under his direction – through the FCA using RDR to their restrictive Trade Practices – we shall see the same attention to detail on ” inducements ” by the willing ( and not so willing ) sponsors of the Conservative Government and their ” donations “. I trust this will apply to every industry e.g Rolls Royce LloydsTSB Group, Pharmaceutricals Engineering and others . . . I my opinion if we are developing a business relationship with any good quality product provider part of this revolves around ” getting to know “, the people and the organisation as I do when I entertain clients – I want to work with people and find out more about them – the LIA used to call these ” Soft Facts “. I wonder if the FCA employees are subjected to the same rigorous ” Inducements ” with their free lunches at IFP PFS annual conferences . . .and their various freebees ? or are they jealous ? and subsequently malicious in their envy ? The cost of a spot of lunch – or a game of golf . . .or the hiring of the SS Moratania or some other cruise liner . . . .for a booze cruise – is insignificant when compared to the new ideas , the new business relationships – and the wealth of new business generated. That is why good quality reasonable product providers – ” buy in ” to these events . . . and this generates business for everyone – but more especially the client is the one who ultimately wins. These benefits are ignored by those who are lacking in business skills at the FCA . . .severely lacking in knowledge – and are destroying one of the most important industries in the UK Plc. As a result, the consequences ar the Amercan’s Chinese and Europeans have entered UK Plc – whether by sponsorship or company purchase – but they are invading our industries purchasing all our good companies e.g Astr Zeneca Manchester United Liverppol – coffee shops on every corner – destroying the proper English way of life unlike the war – where they refused to come in until the end of the war was in sight . . .for the Kudos – the vanity at which they excel. The Americans also excel at ” sponsorship ” ” Inducements ” eg Government and their people, buying up businesses – because the “Do Do” David Cameron is incompetent to run a party, as well as being incompetent to run any economy.

  3. If the bulk of cost will be down to advisers, that’ll be the end of such seminars then. Whether or not that’s a good thing could no doubt be debated, but let’s not kid ourselves that (with no doubt a few exceptions) small firms are going to start shelling out to attend these things in any great numbers.

  4. Rt Hon Sir Arthur Streeb-Greebling 23rd May 2014 at 10:02 am

    DH: What is an ‘odd’ cricket match?

  5. I for one would be perfectly happy to pay for proper educational seminars – not for a one and half hour sales spiel.

    Invesco Perpetual market Intelligence seminars should be an example to all those (Fidelity take note) who talk AT you rather than WITH you.

  6. For the last 2 years I have organised seminars for other local advisers, whether directly regulated, network members or even restricted/tied on subject matters that have interested me and because it has been better use of time for the providers AND for us as advisers. It has been good to develop skills of my apprentices AND crosses over from different Networks and different professional bodies, so SHOULD have been encouraged, not discouraged.

    Running them has cost me TIME and MONEY and would have cost significantly more were it not or the goodwill of my landlord and one of the other tenants in the building who has allowed the Boardroom and Meeting rooms use at NO charge. which has meant that we have been able to have Bromley College (work with CII and IFS to deliver exams and apprenticeships) and Credit Unions present as well as other more esoteric presenters like unofficial presenters with detailed knowledge of the Armed Forces Pension Scheme, IT security and trained divorce mediators to explain their role.

    We had even lined up a motivational speaker for our latest seminar (Jon White (RM retired) who I hoped to meet having seen his inspirational work on Grand Designs…….

    BUT I sent the below email to those concerned recently;

    Good Morning Claire and Sophie, (plus other intended sponsors and Gill from IFACentre) 20 05 2014

    I am going to put on hold organising seminars for local advisers based on a combination of;

    1. Sophie’s response below and
    2. the fact I am currently trying to run a business to support myself and my staff and
    3. study for my Advanced Financial Planning Certificate and
    4. train my apprentice to Diploma Level all within the next 18 months and
    5. FCA new inducement rules (educational for me and my staff, but as to inducements, a bit of a laugh as it has purely been a pro bono thing on my part and has cost me time and money).

    I would very much like to meet Jon White at some point and hope to see him speak at an event, even if we cannot arrange something here this year. Can I ask therefore that in the meantime Claire liaises with Sophie over refunding the payment made in error back in January.

    I’ll BCC other local advisers in case they want to host something in their offices instead.

    Sponsoring Providers lined up were;
    Time
    Vanguard
    AlphaDex (Passive Beta)
    Novia
    ITM (auto enrolment middleware provider)

    Many thanks

    Phil Castle
    Financial Escape Ltd

    Previous sponsors included Transact, Sammedia and WAY and other provides had been invited and even if they didn’t contribute, that wouldn’t influence whether we gave them the opportunity to attend and present.

    The irony is, if I set up a seperate business to run these seminars, I could charge for it and actually make a profit, but if I do it in my own time, I have to PAY part of the financial costs the rules now say….. madness.

  7. To the Rt Hon Sir Arthur Streeb-Greebling

    You have two sides, one out in the field and one in. Each man that’s in the side that’s in goes out, and when he’s out he comes in and the next man goes in until he’s out. When they are all out, the side that’s out comes in and the side that’s been in goes out and tries to get those coming in, out. Sometimes you get men still in and not out.
    When a man goes out to go in, the men who are out try to get him out, and when he is out he goes in and the next man in goes out and goes in. There are two men called umpires who stay out all the time and they decide when the men who are in are out. When both sides have been in and all the men have been out, and both sides have been out twice after all the men have been in, including those who are not out, that is the end of the game

    Yes Its old but its a goodie!! But still odd would you not agree ?

  8. So when the side that was in is out, and the side that was out has been in, but then out, both teams go in to discuss the ins and outs of how the game went.

    Very helpful – I think that clarifes everything!

  9. Philip Castle 23rd May 2014 at 2:29 pm

    @DH – It’s Friday – This is why I played basketball and rugby and learnt to shoot people and mend their guns.

  10. I agree with you that these rules do seem to be madness and sometimes advisers do take rules like this personally particularly if you doing a good job. Unfortunately, it is the few who take this type of inducement to the extreme?

    What I would like to know, however, is how many posh lunches do the top executives and other members of the FCA have had in the last 12 months and from what organisations? Maybe this is a question that Money Marketing can ask the FCA under a Freedom of Information Act request? I suspect this will be labelled as sensitive information and cannot be disclosed under a certain piece of FSMA 2000 & 2012 but only gets quoted when it suits their purpose.

    After all who acts as oversight for the regulator on inducements?

    After all, ask yourself does the previous headed the FCA going off to work for Barclays on a very high salary count as an inducement?

    As so often in financial services it is the few that spoil it for the many and I wish that the FCA would look well beyond regulated firms or other connected firms to see what is being done. As you mentioned there is nothing stopping an individual setting up a marketing firm and training firm and taking as many inducements as you wish. You only have to see what’s happening in the lead generation market to have an inkling what’s going on in the real market place. Once gain the regulator is behind the curve and maybe they should put their own house in order!

  11. Possibly the difference is that us plebs must be protected from ourselves – like children being tempted into the sweetie shop……whereas in the corridors of power such functions are an essential feature of maintaining one’s gravitas…….

  12. Ah but don’t forget the exception. If you are a customer – by that I mean in your capacity as someone who has purchased for themselves – rather than as an intermediary purchasing on behalf of others – then you can enjoy the full hospitality of anyone provided they think you’re worth it.

    So start buying and enjoy your trip to the Caribbean.

  13. One of the benefits of any proper seminar – is the transfer of technical knowledge ( E.G SOFA Society of Financial Advisers at CII ) to encourage knowledge interest and a chance to engage with the product provider – and colleagues. Our group asked Standard Life to come along and present .. . . to meet with 16 advisers including accountants . . .and requested they pay for a breakfast and room hire. Their consultant had opportunity to put their case for Standard Life ( along with his/her breakfast ) – whilst we discussed various aspects of RDR Compliance and insurance company service. The consultant gave a very good account of himself /herself and explained issues and problems for the company – which alerted some to their issues and reasons behind their decisions. The cost to Standard Life would have been £ 150 -00 in total, the cost of their employee for three hours ( being two hours in the seminar – one hour for the consultant to present his or her specific issue and had the opportunity to put over their pitch on a specific issue – in this case auto enrolment ) , the cost of travel to and from the venue. Let us assume the total cost for Standard Life was, for venue, car, travel costs, salary pension was in total £1,000 . . .it seems good value for money to me for an insurance company – to gain access to 16 people in one place and the opportunity for the potential for new business from new agents – and other existing agents – who have been refused any Standard Life consultant – for years ( E.G I have not seen any standard Life consultant since the last Century ie prior to 2000 ). Such is the miserly actions of David Nish CEO – and the poor quality of service – and the arrogance of Stranded Life . . .who lack care . . .lack the building up of Trust . . and refuse to deal with so many advisers. On top of this Stranded Life talk down to advisers in the most discourteous and insulting and unprofessional manner. Strangled Life – talk down to advisers as if they are ” dirt ” under their shoes or as if they are their employee slaves ( referred to as mushrooms – because they keep them in the dark and feed them the dung of a bull ) who are told what to do, and when -and have to follow stranded lifes management instructions. This is the way Standard Life conducts its business from Edinburgh – and refuses Independent Financial Advisers an agency – when they request information about their Pensions Charges ( IE Me ! Sir Shady Crombie and his Bored of Directors, terminated my agency to new business as a result of their bullying and The Board of Directors . . .Restrictive Trade Practices.
    Fortunately, other more reasonable insurance companies wanted to do business in an ethical manner and Standard Life’s business and customer increments were transferred away. That was a very easy Reasons Why Letter – confirming sir shady’s crombies, bullying, and tardy practices – which had a direct impact on my clients and his withdrawal of service ( to include the removal of any consultant – relying on a telephone based trainee consultant – who had to refer to others every time, as a result of lack of knowledge or in some cases common sense. She did not have a car and was tied to the office – in a literal sense, and as a result Stranded Life did not get business. Now to me the Standard Life manager – refused to come to our offices – to discuss the matters – and the Board of Directors did not care. With such tardy treatment of IFA’s by Standard Life – it is easy to see why so many advisers are abhorred by their tactics and their tardy practices. Perhaps one day they will get a CEO or Sales Director – who is interested in providing service – but advisers must wait and see ? In the meantime clients suffer the poor quality form this bullying insurance company – currently housed in the bankrupt Gherkin – where you need to show your passport – to gain access . . . .is this the start of their move South ?

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