Reality TV shows have never been my thing, especially as they seem to last far longer than necessary. The current run of Big Brother has evicted several housemates, only to invite viewers to elect them back in. This has caused a furore and money made on this has been diverted to a charitable cause.Indecisiveness is a major flaw in the English character and is seen in all trade bodies, quangos and civil service departments in the UK. We now hear that the Association of British Insurers has taken the reform or removal of indemnity commission and popped it in the shredder. Just as we thought churning was to be restricted to the dairy industry, it now seems that it is safe and can continue. I suppose I should have guessed when Norwich Union introduced its new product, which has the benefit of indemnity commission, that the ABI would defer any move away from indemnity. Now, before I go further, if a commercial body takes the risk of paying me excessively without the client suffering, then I see no commercial reason to decline popping a large slice into the call account as we go. But if the whole payment is treated as earned, then we have two gullible parties and not just one. In moving to fees, we need the FSA to start to see the difference between a wrap and a product. The wrap lends itself to fee-based business only. In fact, commission does not sit easy with the wrap concept. At the moment, the FSA is indicating that in using one wrap, you are no longer independent, so we could have a highly professional firm charging fees direct or via the wrap but being seen as less professional than those which sell products rather than advice but can still claim to be IFAs. This makes little sense and in reality means that the independent title is already tainted and of little worth while it is possible to place bias on the commission option over the fee-based option. If we want to serve the client and not the provider, then it needs to be the client who pays us, either direct or via the wrapper. As long as the provider dictates the cost of advice, we cannot move forward, nor can we afford to serve as broad a market segment as seek our quality of advice. Bring back CP121? When the ABI decided to look at the abolition of commission per se, I wondered if it was not in fact looking for the reason not to do it as opposed to the reasons to bring it to a close. Ned Cazalet’s report should have been the final element of research that helped it justify its stance in removing or at least reducing commission. Instead, we see the whole matter parked and unlikely to be reopened until the first of the providers on its working party goes to the wall. As we find information takes a minimum of a month to obtain, we have to consider charging all new clients a significant deposit. Instead of debating commission, could the ABI not have looked at service which continues to decline? But this is not a strategy that will ensure its survival. The harder the ABI makes it to review investments, the easier it makes the decision for us to move the assets elsewhere. Back to reality. The search for the next Maria has got my interest. Let us hope Andrew Lloyd Webber is better at searching for a solution than the ABI or perhaps it should be renamed as the Association of British Indecisiveness? Well, it would be if it was not so unsure.
The Financial Services Compensation Scheme compensates customers of insolvent financial services firms. It gives customers confidence that most of their capital is secure and so helps encourage saving and investment. It has a small staff and resolved nearly 26,000 cases last year.
Sesame chief executive Patrick Gale claims multi-tied rivals, including Barclays and Openwork, run a quasi-tied model while Sesame’s Select offering allows advisers independence of thought. Gale says Select advisers can go off panel and access the whole of the market while other companies restrict their advisers’ choice of provider and have effectively just tagged extra […]
The Government is responsible for advisers and providers not being ready for A-Day according to 500 IFAs surveyed by Defaqto.Research undertaken as part of The Pensions Report due to be published in October found that the majority of IFAs surveyed said that both advisers and providers were unable to adequately prepare for A-Day because the […]
UCB Home Loans has become the latest lender to up it rates following the base rate rise two weeks ago.The lender will increase its variable rates by 0.25 per cent for both new and existing borrowers from September 1. This follows the decision to increase the base rate from 4.5 per cent to 4.75 per […]
December has left me destitute. My piggy bank lies broken and empty, my lunchtime meal deal feels like an extravagant expense and I’m down to the Bountys in my box of Celebrations. But I won’t mourn my dearly departed pennies. Between buying gifts for loved ones (then deciding to keep them for myself) to treating […]
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Offsetting the cost of advice this way would benefit clients and advisers alike One of the multiple barriers to better take-up of financial advice is that some people are unwilling or unable to meet the upfront cost. In response to this, the government has allowed people to take small chunks (three lots of £500) out […]
Fund managers like to trade off having a unique style. There thousands of funds out there to choose from – the question I often hear from advisers is: what makes this person different? Sometimes this can be a really tough one to answer. “We invest for the long term” is all fine and good, but […]
With rising costs and an increasingly tough regulatory market more advisers are looking to outsource their investment proposition, with many leaning towards discretionary fund managers. But while the number of advisers using DFMs is on the up, overall satisfaction with them has dipped. According to a recent survey by financial information firm Defaqto, 74 per […]