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Richard Bishop: I’m fed up being a financial adviser

Richard Bishop MM blog

I am pretty fed up of being a financial adviser. The majority of my adviser friends are disillusioned and fatigued with the constant change and lack of clear guidance on the key issues surrounding the retail distribution review.

With a less than a month to go, providers are laying off staff quicker than banks are sacking advisers. Many advisers have not got a clue what their disclosure documents should look like next year. Like most advisers, I want to earn a living, a good one preferably. And yes, earning my living doing an honest, professional job for my clients.

I have my statement of professional standing pinned to the wall, next to my shinny level 4 Diploma certificate. I moved to fees three years ago, sacking 30 per cent of my client bank in the process. If you have got less than £100,000 I will not see you and my minimum charge for doing anything is £500.

I am no more or less ethical now than five years ago, my clients trust levels are exactly the same and I was never swayed by commission in the 12 years of operating as an adviser. I did not sell dodgy funds, recommend investing in timber funds or disservice my clients because I only had A levels in financial advice.

The RDR is a complete waste of time, it will result in less advice and the objectives could have been met by simply capping commission. As for the level 4 exam standards, I can say unreservedly I know no more now (academically speaking) than when I passed the financial planning certificate in 2002.

The final insult is the architects of this car crash are no longer with the regulator, they are off to sunny climes in Dubai or enjoying large expense accounts at accounting firms. If you set a course to hit the iceberg you should at least stay on the sinking ship and go down with the rest of us.

Richard Bishop is director at Premier Practice

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Comments

There are 41 comments at the moment, we would love to hear your opinion too.

  1. Richard, very succinctly put. It sums up the whole thing very well and the vast majority of adviser’s, providers, fund houses and gold bless them – our clients could not agree more. It is one of the most expensive play things of all time which is going to have unbelievable impacts on a huge number of people. All over something that FSA could have sorted over an expensive lunch somewhere with every chief executive of an FS provider firm. Telling them that the FSA will come down on the providers and their mamagement team like a ton of bricks if they are deemed to breach a maximum commission agreed with the industry. ie 3% plus 0.5% trail. I mean personally hold these exec teams to account with personal fines and ban them if this was broken.

  2. @ Richard Bishop – I nearly did a double take as i thougt I’d written it as I was definately thinking it!

  3. I have to agree with pretty much all that you’ve said. Most of the aims of RDR were sound but we all know that they could have been achieved far more easily and with less pain for all involved.

    My guess is that this will be a massive train crash in January as financial services will simply grind to a halt. Firms will go bust and thousands will lose their jobs.

    You would have thought that if RDR was so good then why hasn’t Hector and co hung around to receive the applause they believe they so richly deserve.

    Whatever happened to the RDR aim of improving access to financial services??

  4. Cant disagree with much of that.

    As I have said many times before, just wait until the providers go bleating to the OFT about restriction of trade when the balance sheet collapses – shall we say mid to late 2013 ??

    You have to ask where they had put their collectives heads when all this originally hit the fan ‘cos there aint many left who think RDR is a good idea now ! When RDR fails (and fail it will) heads must roll !

  5. Nicholas Pleasure 7th December 2012 at 1:04 pm

    I agree. It’s the constant uncertainty that gets me. A 10000 page rule book means that no-one can meet every regulation and personally I feel that I can be put out of business at any time by the regulator, even though I’ve never had a complaint and my clients love me!

    No single regulatory initiative is allowed more than 12 months before it is changed for something else. We spend all our time firefighting stupid regulations and little building our businesses.

  6. Agree with all of that – well put Richard.

  7. Running an financial advice business in the UK is a little like opening a business in Somalia.

    There is no consistency of law. No proper justice system and the police force, judiciary and jailer are the same organisation and are totally unaccountable. They extort any amount of money from business with the thread that they will be closed down if they don’t pay. The money can be used for anything they like.

    It’s pathetic that the UK government has let such a situation arise.

  8. I totally agree, I de-authorised last month with a view of just advising on Mortgages, life & GI for 6 months and re-authorising after 6 months if there looks like there will be light at the end of the tunnel but it just looks like a Black Hole at the moment.

  9. How very true, this certainly mirrors my postion and feelings.

  10. Anyone else see John Bishop on Who do You Think You Are last night? His great grandad was a stoker on board a ship that ran aground during the Crimean War. Poor soul and all his ship mates faced Court Marshall for losing a ship! At least the ships master paid with his life having been fatally wounded.
    I feel like that poor stoker! How much better would I feel if Sants et al were “fatally wounded” instead of cosying into well paid futures elsewhere?

  11. Never a truer word typed! I agree with everything in the article. A complete and utter shambles and after 28 years I no longer enjoy this job.
    @ previous comment. When RDR fails (and fail it will) heads must roll – I wouldn’t hold your breath for that one. Unaccountable jobs for the boys.

  12. There should have been more comments like this at the very start of this insane exercise. I have resigned from my network as a result and have never felt so relieved. There is a big wide world outside of financial services.

  13. Hello I am a member of the public.

    Could you tell me what RDR means?

    Its just I am thinking of putting £50 a month into an ISA next year and I am not sure the best place to put it.

  14. Richard you are spot on and reflect everything I have been thinking for months now. As you say, a commission cap, more rigourous CPD and getting rid of establishment charges and enhanced allocations would have done it – there you are, 14 words. I guess it doesn’t justify the snout in the trough if it were that easy.
    I am now just about to return call to enquirer looking for a new IFA ‘because of RDR’, waiting to find out if his IFA has left or binned him as a client. Will he pay the fee? Let’s see……..

  15. Ditto all above.

    Along with all the @@***@@@ at the FSA who dreamt up and forced RDR on the industry, and have subsequently left to take up lucrative positions in the city. Can someone remind me what happened to Mr AIFA when all this was going off…Oh I think he took up a job paying £800,000 per year, not bad for turning a blind eye.

  16. I still really enjoy sitting with clients and helping them through their Financial Affairs. The last 6 -12 months have been interesting and has made me realise the deep bond of trust my clients have with me.

    It reassures me that they know I only have their interests at heart and that all I do for them is greatly appreciated. They continue to rib me when I tell them how much I earn out of helping them.

    AND THEN they say to me: If something isn’t broken why does it need to be changed and why, why why do you need to be authorised and regulated by a shambles like the FSA as they do nothing for us.

    Clients have a way of nailing it on the head.

  17. Whilst this may be true for you Richard and various other contributors, sadly there is little evidence to suggest that large numbers of “advisers” were not influenced by commission levels from different providers and different products. Things have certainly improved, but if advisers were really just as well “educated” then how do so many get taken in by high commission “poor” products… many of which cost the rest of us a lot with our FSCS levies.

    RDR has been very badly implemented (if indeed it has been) your assertions ring true with any half-decent fair minded adviser, sadly there have been lots that didn’t know the what they were doing and would be selling as much as possible for as much as possible. Client interests were often not served.

    So if I may partly agree with you. RDR has been a disaster in many respects and the outcomes are almost certain to be worse for availability of advice.

  18. anon
    RDR means no financial adviser can afford to advise you on where to place your money
    best ask Ma

  19. @anonymous 1.17pm – have you got two hours this afternoon? I will explain our regulatory status, data protection, who to complain to, fee structures, service options and proposition. After that we will conduct a full analysis of your personal situation and ask lots of questions about risk. After all that w can actually start talking about what you want to speak about – ISAs. We then will select a home and set it all up, ooops, just realised that he left the conversatioin when I told him that he would have to pay the first year’s savings to me just to set it up (and that is cheap).
    Next enquirer – sorry, you can’t possibly afford the process we adopt to recommend an investment (it is the same for an investor with £250k you know). I suggest beer, horses and lottery tickets, off the record that is….

  20. Peter Davies @ Create Wealth Management 7th December 2012 at 1:26 pm

    Dear anonymous

    In response to your question – are you any good at DIY ?

  21. I’m with you all the way Richard.

    My period of service as an IFA is also twelve years, although I have a level six qualification.

    My reaction to the principals of the FSA accepting or seeking positions of great wealth in the private sector is much the same (I posted recently-“be wealthy, be very, very wealthy”).

    The RDR could indeed have been avoided by a maximum commission agreement; the requirement to obtain a level 4 qualification is unnecessary and has been responsible for the loss of hundreds of first rate advisers; at this stage of the proceedings-weeks way from the effective date- I still do not have a clear idea of what many providers are doing about so called legacy commission and nor does my network.

    One day this will all be history. And rather like some of history’s darker moments we will be wondering how the hell it happened

  22. Thought the author was someone else with this tome.

    Yep the RDR is a crock when the unlevel playing it creates is not addressed by the Regulator who brought it in.

    We are unprotected by law and subject to molestation without redress by a state organ who are unaccountable.

    As for learning no more under QCF level 4 I would like Richard to clarify who his exam body was.

    In addition I sat & passed 2 R papers from the CII and it takes the biscuit that this level replaced the old AFPC with the G and J papers which were a hell of a lot harder. Yes i did learn lots from them.

  23. Fair play in putting your head above the parapet and saying what you have. I largely agree with everything.

    I have always accepted that the principles originally behind RDR were understandable and laudible, but the implementation has been, to put it mildly, cack-handed.

    The victims of this whole process are not only the many hundreds of high quality, ethical and professional IFAs who will no longer wish to, or be able to carry on what they have spent decades building up, but the consumer who, unless they have £100k to play with, won’t be getting any help from Mr Bishop or most of the rest of us.

  24. Now then! Anyone will tell you that the secret of running a successful business is being flexible. Sadly our industry is tarnished with mis-selling, and so as an industry we only have ourselves to blame. Of course pretty well everything Richard says is true, but wait a minute……consistantly low interest rates tempt more people into the market, pensions have a very high profile at the moment, and we have a a lot less competition. Its true that the days of the Fat IFA spending three days a week on the golf course are gone, but we can look forward to becoming a respected and well renumerated profession. My advice…ignore the industry rhetoric and “white noise”, stick to what we do best, looking after our clients.

  25. Hear bloody Hear!

    Well said – especially the point about maximum commissions.

    If that fool Borrie and the OFT had not insisted on abolishing the MCA all those years ago, many of the issues which led to RDR could have been minimised and controlled.

  26. I’ve been very satisfied with the way Virgin has operated the NW main line for the last few years, it is generally on time, clean, pleasant staff, Pendolino trains etc.

    We recently had cause to travel to Edinburgh, ironically for an FSA seminar, and inadvertently booked on to a 1st Trans Pennine journey. What a contrast – I felt ill by the time we duly arrived and it took longer and yet they seem to be the Governments preferred bidder.

    My question is, what is it about public sector or quango types that take a reasonable idea, spend years and £billions on it but end up with a horse’s @rse at the end of the process. Any parallels?

    Incidentally I heard a rumour that the FSA’s next job is to sort out the North West main line fiasco once RDR is implemented

  27. Speaking as a Client 7th December 2012 at 1:55 pm

    Well, I must admit there are good and bad in life, some FA’s are a bit like estate agents, I know as I had dealings with two who seemed quite happy to fleece at every opportunity. The third guy seems okay but if not a tad expensive. My view is that you lot have had it to easy for to long, now you have to work for your money and justify your self, which is something you never had to do before. It seems as if you all have had a kick in the pants, and I must say about time too!

  28. anon @ 1.55
    Never mind a kick in the pants
    We have been kicked in the teeth. stamped and spat upon by an unelected unacountable, out of control regulator.
    Why use an estate agent or an IFA?
    A smart a@@e like you could surely see to your own affairs.

  29. Oh dear dear. How very depressing. Without any hint of irony or condescension I truly sympathise and feel sorry that so many are in the depths of despond.

    Sure the whole thing is a mess. Sure we have a regulator that really doesn’t what the left hand is doing. BUT haven’t any of you heard of the expression:

    “In order to succeed others must fail”

    Come on where’s the famous IFA bloody mindedness? Determine to be one of the former – not the latter. For heaven’s sake I’m probably at the senior end being comfortably past State Retirement age, so if I can see some daylight why can’t some of you youngsters manage to try and find a chink of light? There’s another acronym – DLTBGYD. Stick with it.

  30. @Anon 1.55pm. Sounds like you don’t ned an IFA, you know all the answers already. Don’t disagree that there are bad IFAs out there but you must be some sort of jinx if you are on number 3 and still not happy…. or……
    By the way, if you do your own investments be careful not to press ‘send’ three times – you will have no one to sue but yourself 😉

  31. The client is always right 7th December 2012 at 2:28 pm

    @anon 2.03
    You don’t know me, likewise I don’t know you either.
    I use an IFA because of my wealth and my potential to keep on earning big bucks?
    Trust is very important in any business, but when you have slimy dirt bags trying to fleece you to line there own pockets, what would you do? Your response is typical of somebody who has a lot to loose, possibly by hiding behind the smokescreen for so long.
    Like most things, only the best survive, I stand by my original comment as there are devious people out there, and I would welcome any hard working honest individual, if YOU can’t stand the heat, suggest YOU find another career.
    By the way, if I had the time, I would sort out my own financial affairs. Enjoy 🙂

  32. philip spierling 7th December 2012 at 2:50 pm

    @ anon 2,28pm

    what do you class as big bucks,

  33. Goldfinger D Megabucks 7th December 2012 at 2:55 pm

    Anon @ 2.28

    Bet my bank balance is bigger than yours !

  34. @ Anon 2.28pm
    Hey ‘Big Bucks’, do you normally get someone to do your proof reading as well? Looks like you don’t have the time to do that yourself either.
    I guess the ‘big bucks’ you earn haven’t fleeced anyone else on their way into your large (and looks like deep) pockets. You must be worth every last cent!
    Have a great weekend y’all – and chill 😉

  35. Hello Playmates!

    Ding Dong!

    Love and kisses

    Larrykins xxx

  36. Anon @ 2.28
    A lot to Loose? – Like a belt perhaps?

  37. Will the last one out please switch the lights off!!!

    The regulator needs us to pay for their expensive and sat in deficit final salary pension scheme, I suspect they are realising the demise of the industry at their hands and now need fines to plug the pension gap just before the scheme, along with our entire industry is wound up!

  38. Thanks for sharing Richard.

    I agree totally with what you say, not wishing to make this sound political, but there’s no sign of it getting any better.

    RDR was started under the last government, but this one doesn’t seem bothered about whether changes implemented are likely to achieve any good outcome.

    They just seem to think that if any role in society is done less than perfectly to kick the **** out of the people doing the job, rather than helping them understand what needs to be done and getting it right.

  39. @ anonn – ‘like estate agents, I know as I had dealings with two who seemed quite happy to fleece at every opportunity.’

    Another sweeping statement from the ill informed – what is your job ‘mega bucks’ I would like to know.

    As for the RDR, it is the product providers and products which cause the problems not the distribution. Can be really easily fixed.

  40. The FSA has killed off this industry.

    I was made redundant in early September, I am Chartered and a Fellow but have only had one interview for an employed position.

    I thought by passing all these exams I would be the new world, but thanks to the FSA, firms will be focused on how to make the RDR work for the next 6 months and there is unprecedented applications for those jobs which are available due to so many firms (primarily the banks) laying off at the same time for the same reasons.

    Damn you.

  41. Dominic Thomas | 7 Dec 2012
    You are an idiot! The FSA conducted an enquiry into the premise that IFAs were influenced by commission. BUT they didn’t publish it and it took a financial journalist to use the freedom of information act to obtain a copy if the report! The report showed there was NO influence on advisors recommendations by commission. How come YOU have reversed that report? Please tell where you obtained the conflicting report? Please get your facts right!

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