This is the month where ’out of office’ notices seem to overtake responses to emails and we can catch our breath as the FCA drops hints as to its priority list.
The regulator’s recent comments on trail commission simply underline the linkage needed between remuneration and services. I know that some will tell me I am wrong, that commission payments are contractual and there is no such link but then they will be the same people who set up GPP’s thinking that the commission on increments was guaranteed and the same people who have not been reading their terms of business letters as they have been rewritten by the providers.
At the same time we have great angst with the advised versus the non-advised debate. The latter term is certainly a better descriptor than execution only but whatever term is finally agreed upon we need to stop people advertising one thing and providing (or more accurately not providing) the expected service.
Firms that call themselves financial advisers should do just that. If they offer a mix of services then they need two clearly distinct brands or names. We recently had an email from a large firm which offers no advice to the bulk of its clients but their emails call their people “financial practitioners”. Is that right?
Just as the banks have been brought to book, the larger distributors need to be controlled far better than they have been to date.
As standard annuities become increasingly poor value, I find it hard to see how you can offer enhanced annuities, far less investment linked annuities, on a non advised basis.
Advice at retirement is no easy task and people need help. Currently we have a debate on the pot follows member initiative where on moving job the pension plan follows the member by default. We also need a sweep up of the small pots from previous changes of job or where his employer has moved provider.
Some employers offer no funding for advice for past benefits but many providers will not accept transfers where no advice has been given and this leaves the member in the equivalent of a pensions no-man’s land.
If we are to prosper we need to lose that rear view mirror and start to set the strategy by engaging with the regulator and the Government. To do this we need an aggressive and informed trade body, what we have at the moment is not worth supporting, one is too small and the other far too bureaucratic.
Can I just say I am not volunteering but we need someone who can command the attention of those who matter. The late John Ellis would have been ideal. His quiet diplomacy but nonetheless forceful views are sadly missed by all of us who recognise that at the moment they are exactly what we need. Let us hope that an alternative will soon appear.
The FCA gives me the impression that reasoned argument is welcome but simply wanting no change is untenable and not worthy of an audience.
In closing, can I also make the plea about the lack of control shown in contributing to on line debate, these blogs are not private and in many cases reflect badly on us. I support freedom of speech but some comment border on bullying, that is, only their opinion counts.
We all need to contribute to the development of our sector. Those who are negative and anonymous would be better to be out of office permanently and do the rest of us a favour.
Robert Reid is managing director of Syndaxi Chartered Financial Planning