I read with interest that the current England manager believes 100 words of English is sufficient to make himself understood. What that says about footballers, I am not so sure.
As the end of the tax year passes, we now only have 20 months to go before the retail distribution review takes effect – yet you would never know it.
Many remain in a state of denial, fuelled in part by the lack of detail on how various elements will work in practice.
For example, the concept of an extension to the deadline for achieving QCF level four has been promoted by the Financial Services Skills Council, among others.
The reaction from the FSA has been as expected, in that plenty of notice has been given ahead of the deadline. That is why I have always stressed that time is the most precious commodity during periods of change.
Adviser-charging lacks real definition and begs some key questions.
- If an adviser charge is predominantly advice and not intermediation, then surely VAT is due?
- If a client cools off, what is returned to them? The original investment or the investment net of the adviser charge?
- If a plan is set up on one charging level, a flat 1 per cent, for example, can the next intermediary alter that to a lesser charge, maybe 0.75 per cent, or could they increase it to 1.5 per cent?
No provider has yet been able to answer my first point, they have not really considered the second point and the third is a systems’ nightmare.
It is as if Fabio Capello is writing the conduct of business sourcebook – perhaps that is the reason for the delay. This issue extends to consultancy charging, where the joint working party is likely to deliver a fair but unpopular definition of what is fair and what is not.
Like the 100-word limit, trying to deliver consultancy charging that is not unfair to the scheme member, without asking the employer to pay a realistic set-up fee, is impossible. The habit of many executive benefit consultants taking ongoing remuneration where there is no ongoing service is provided will not be tenable. Where this leaves these firms is anyone’s guess but they may decide to quit that part of the market. Given the service many of them deliver, that is no bad thing.
It is all very well sticking to deadlines but that requires the regulator to be fair and to deliver the rules in good time. At this rate, I can see some providers unable either to provide adviser- charging or, just as bad, unable to deli – ver in the required format. The ongoing debate is now considering the impact of paying adviser-charging from bonds and pensions. With bonds, does ongoing charging form part of the 5 per cent annual allowance? For pensions, would it be a unauthorised withdrawal? This would seem to reflect a lack of joined-up thinking between the FSA and the Treasury.
One hundred words look pretty puny when you consider the average three-year-old has 3,000 words at their recall.
I think what this proves is that Mr Capello knows a lot about football but precious little about people and how to communicate to them.
If you do not agree, ask Rio Ferdinand.
Robert Reid is managing director of Syndaxi Chartered Financial Planners