Publicists say you should not complain if you are in the news but you should worry when you no longer make the news.
Over the last week, we have watched one peer after another talk themselves into trouble. Many would argue they said nothing wrong but the pressure to fall on your sword these days is immense, hence my surprise at the invective that followed the publication of Dan Waters’ imminent exit and Hector Sants’ comments on attrition caused by the RDR.
It reminds me of the Monty Python sketch about The the MacKamikaze Highlanders where they all attempt to throw themselves off the battlements and as the last few arrive they are restrained lest the regiment be wiped out.
Dan Waters was one of the few people in regulation who seemed to understand what I do for a living. Given the changes in regulation in the US, Dan’s return comes as no surprise to me.
Hector’s comments were no surprise and the lack of a constructive response showed that people were reacting and not thinking. After all, I believe Hector’s numbers are probably correct, if we consider who will leave either due to failing or skipping the exams.
If we then think about how many will fold, due to them being unable to create the same level of income under adviser-charging, then another 20 per cent will probably follow.
Far too many advisers produce a level of business they find hard to increase. The inevitable reduction in their income as a result of adviser-charging will require a significant increase in their activity levels. When that does not happen, they will have little alternative but to call it a day.
Some still believe the RDR may be cancelled in whole or in part. This is not good. It will happen and there will not be any extra time. Time is precious and it should not be abused.
Since the days of Colette Bow at the PIA, there has been an effort to reduce the size of the adviser population. This will not help the public but it will help the FSA. It is just a pity it is meant to be helping and not handicapping the public. If grandfathering were to become an option it would simply defer the time when the public ask the difficult questions.
The other week, I watched the planning equivalent of a car crash as a bank and a provider prompted someone to cancel a potentially exempt transfer by their collective lack of knowledge. In the style of Donald Rumsfeld, there are known unknowns but it is the unknown unknowns that will get you. Knowing your limits is essential but if you do not know what they are, you are positively dangerous.
The concept that one person can operate as a GP-style adviser is not tenable. The sooner everyone knows their limits, the sooner we will benefit from the RDR.
As to all the “raised voices” posting comments on the web, I return to the words of Monty Python: “Is this the five-minute argument or the full halfhour?” We need to make sure the arguments are positive and not just hot air if we are to have our voice heard over the noise.
Robert Reid is managing director of Syndaxi Chartered Financial Planners