This seems reasonable, given the need to get the right decis-ions made and a sensible consul-tation launched. Pain’s remit includes all the things going on in banking and mortgages so we can understand why he does not have a lot of time on his hands to get himself fully informed of the facts, figures and risks.
But we will try to suggest a few RDR issues in a nutshell. As a newspaper, we are broadly in favour of IFAs’ qualifications increasing but only by a reasonable level and given a reasonable timetable. We think customer-agreed remuneration, applied intelligently, can be made to work.
We are wary of the lobbying power of the banks and arguably some multi-ties. We do not believe they should be knocked out of the market but we do feel there are several questions to be asked about how they disclose their tied relationships. There has been a strong focus on commission for IFAs and the need to change how their remuneration is expressed. We therefore suggest that the ways in which the multi-tied and tied advisers are incentivised should be scrutinised, particularly if there are gaps in their advice.
We think that by far and away the most difficult part of the distribution reform process is trying to crack how to distribute protection and savings to those who do not receive advice at present.
We also have to wonder whether the FSA can even begin to start to crack that particular nut without cooperation not just from existing players in the market but also from the Government in terms of means-testing, benefits and actually a whole different approach to savings policy. That remains to be seen.
Clearly, the FSA is determined that its agenda for reform of the pension and investment sphere of retail financial – RDR, TCF et al – are not put on any sort of regulatory back-burner.
But we would finally suggest to Mr Pain that while the life and pension side of advice may nudge in the direction of more qualifications, we still think advice is better than it has ever been.