View more on these topics

Taking issue with the offset argument

Both Robert Reid and David Elms are quoted as saying that if commission offset is banned, than less than 2 per cent of advisers will be able to call themselves independent. I would take issue with this.

If we assume that there are around 25,000 registered individual IFAs in the UK, then nearly 10 per cent of them are already being paid by their clients without the need for commission offset.

They are the 2,300 who use Transact. To these can be added those advisers who use other wrap services that work on the same principle, that is, where the adviser and client agree the form and amount of the adviser’s remun-eration and where the client instructs the wrap service to deduct those amounts from their cash held on the platform.

This can take the form of an hourly rate, a fixed, or an /ad valorem/ fee. For those advisers who still feel that asking the client to pay for advice is tantamount to comm-ercial suicide, we must redouble our efforts to convince them that this need not be so.

As I say, there is ample evidence supplied by those 2,300 advisers and their 52,000 clients who hold £4.35bn on Transact that the “pure” wrap service enables advisers not only to concentrate on providing advice but to be paid by the client for doing so.

But, alas for many, it will be a case of there are none so blind as those who will not see.

But all is not lost. Many of these advisers will concentrate on providing primary advice and will be paid commission by product providers.

The Finance Act 1986 got rid of many of the worst excesses that existed in financial services before that date but, sadly, it also signalled the dramatic decline of the direct salesforces.

Since then, the sale of life and pension policies to all but the more affluent has declined in equal proportion. Most professional financial planners will not be able to afford to operate in this market.

A return to the commission-paid salespeople who believe strongly in the need for individuals and families to be protected against premature death or prolonged retirement is to be welcomed.

Malcolm Murray
Head of marketing
Transact
London EC2

Recommended

A Shaw thing

Sam Shaw is a reporter on Money MarketingThe joys of having taken Monday off as leave soon became a distant memory as I walk in on press day to land straight in the middle of the Friends Provident/Resolution merger talks.Having spent much of Tuesday discussing the “what might happen” with many an IFA to gauge […]

Less than one in 10 will be able to afford professional advice

Less than one in 10 people will be able to afford “professional” financial advice, with the vast majority of the population in the primary advice bracket, according to the FSA’s own statistics.In its retail distribution review discussion paper, the FSA says the costs of professional requirements for firms operating at the top end of the […]

Vine-Lott to chair National Skills Academy for Financial Services

Tisa director general Tony Vine-Lott has been appointed to chair the newly created National Skills Academy for Financial Services. The Academy was launched in May 2007 by then-Economic Secretary Ed Balls MP and Skills Minister Phil Hope MP. The National Skills Academy for Financial Services will set a new standard for excellence in training and […]

Hometrack acquires SIA Limited

Hometrack has acquired geographic information systems software provider SIA Limited. Hometrack chief operating officer David Catt says: “This acquisition is a perfect fit for Hometrack with real product synergies which are of mutual benefit to both sets of clients. The system comprises a sophisticated mapping model which is capable of graphically highlighting a wide range […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com