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Tories look set to deny adviser long stop

The Conservative party looks unlikely to introduce a 15-year long stop if it comes to power after it claims to have evidence to suggest it could be detrimental to consumers.

In a letter to Harvest Independent Financial Management IFA Julian Stevens, shadow financial secretary to the Treasury Mark Hoban says: “To justify its introduction beyond a reduction in compensation payments, there would have to be an evidence base that pointed to an increase in the supply of savings and evidence that the long stop would not unduly affect demand through the reputational damage it could cause – but neither exists in concrete form, indeed evidence has even emerged to the contrary.”

On the RDR, Hoban says the change in regulatory structure from the FSA to the Consumer Protection Agency “should not affect neither the progress of the RDR not the timetable”.

Speaking to Money Marketing, Hoban says the timing of the RDR will become a matter for the CPA.

He says while the deadlines are unlikely to be affected, he refused to comment on whether the CPA will look to change the content of the paper.

He says: “The RDR is a matter for the regulator not for government. What I tried to say in the letter is that responsibility will be transferred from the FSA to the CPA and I see no reason why the RDR will be delayed.”

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Comments

There are 7 comments at the moment, we would love to hear your opinion too.

  1. The only way out of this is….
    …to repeal the Limitation Act. The 15 year long stop is written in the statute book for good reason, nobody can override it, not even the FSA because David Kenmir told me so himself. The alternative is to make the FOS abide by Statutory Instrument 2326. I can appreciate that many products are long-term but when the FOS is so inconsistent we can never have faith in it.

  2. NO LONG STOP = NO VOTE
    No change there then
    one lot is as bad as the other.
    We should let all parties know none of us is willing to vote unless something is done to address this issue. It is time we fought for what is rightfully ours. Anyone fancy staging a protest outside Canary Wharf?

  3. R. Gronow IFA (North Wales) 20th August 2009 at 5:32 pm

    We’re All DOOMED!
    Now that the Tories have shown their true colours, the writing’s on the wall for us all. Yes I’ll prepare myself for RDR from a CPD perspective, but honestly, if Commission based Remunerationis replaced by Fees (the modern name for ‘Bid-Offer Spread’?) and factoring is not allowed for regular based premium business then, regrettably, I must consider myself to be working a 3 year Notice Period. I admire the determination of Evan Owen (IFADU) and others who are actively trying to influence this devastating change to our business – but I’m afraid that nobody is listening.

    Those of us too young to retire need to look at themselves in the mirror and consider alternative income streams if we are to survive – otherwise risk getting caught with your pants down if (or should I say when) RDR is implemented in full.

  4. What a load of drivel!
    Mr Hoban’s statement suggests that having a 15 year long stop is likely to put people off saving. I wish it were true that people thought that far ahead about their finances, but they don’t.

    The lack of a long stop will deter some people from joining the new 2012 post-RDR financial services profession, which would be a shame. Alll we ask is for a level playing field. It’s just a pity that a politician’s long stop is set at five minutes so they can’t be held accountable for crass decisions like this.

  5. Sent to my prospective MP
    As I mentioned before, the 15 year longstop issue is a matter of principal and the Conservatives appear to be saying they support removal of a longstop for one section of society, despite the original ruling by the House of Lords. Please listen to the attached http://main.ifatv.eu/?q=node/716 I along with a large proportion of the IFA community will now actively tell our clients why we will NOT be voting conservative, NOR NuLabour. I will not promote any other party and I will continue to tell clients which parties are willing and happy to abuse one section of society i.e. advisers, and let ALL OTHER UK PROFESSIONS keep their defense of a 15 year longstop.

    We have effectively been made outlaws be removal of this defense in law. If we live outside the protection of the law, then expecting us to abide by any other UK laws when or if a complaint is pursued outside a 15 year longstop is VERY unwise. Bear in mind the FOS can impose a settlement of up to £100k and effectively make someone unemployable ever again who may well have done everything right over 15 years ago judged against the rules of the day, but not with the benefit of hindsight 20 years later will leave some advisers with nothing much to loose in fighting the system.

    As an interim, we as a firm are going to build in a 15 year contractual longstop which if the FOS then do not accept, all those who have supported this inhumane action need to remember that the original intention of an eye for an eye was not to kill someone who had only lost their sheep, but to remove something of equal value. If I or any other IFA loose their home due to the absence of a 15 year longstop, then I would fully support them removing the home of anyone actively supporting the removal of the longstop.

    So far the list of those who could find themselves on such a list is mainly made up of NuLabour supporters and the F-pack, it will be a shame to see Conservatives on the same list.

    From my point of view I do have to question why I spent 16 years in the Territorial Army (14 under a Conservative Govt) because of my belief in defending my country only to find you are prepared NOT to provide me the same Defence as Solictors, Accountants, Architects and anyone else in the UK get. If I am treated like a Terrorist, I might as well be one.
    2nd email follwing their reply If we meet, I will aim to get you on record as either condemning or condoning this issue and if you get in to parlament (as remains likely), then I will look to see whether you vote on any issue in this respet which arrises by conscience or by whip. You may feel this is above your pay grade, but you need to have a personal position on it.

    Prior to the election, if you publicly condemn the removal of the longstop contrary to what your party via Mark Hoban has said recently, then those clients of mine who live in South Thanet will be told that (I will not tell people who to vote for as whilst I have strong moral values, they have little to do with party politics, but I will tell clients why I cannot vote for an individual on moral issues so they can reach their own conclusion and if they are floating voters, that could make all the difference, especially to your potential seat bearing in mind how margiannl South Thanet has been), whilst those who live elswehere will be told ask their MP or ask another IFA locally what response they have had from their local MP has been

  6. Tories set to deny adviser long stop
    A missed opportunity for the Tories to secure support from what arguably will be its’ storm troops ‘ in implementing cultural change to saving and greater financial responsibility after the election. However we must ensure that we lobby for this after all a fresh set of faces in a future Tory government should be more open to persuasion particularly given our (recognised?) ability to influence the consumer . Notwithstanding that there is also the human rights element currently under review. A change of government could be the best thing to happen to the sector in more than a decade but it will need working on for the best outcome for ALL parties -IFA’s consumer as well as Government. I look forward to a new era of financial rectitude!!

  7. Tory views on the RDR (20 AUG)
    Mark Hoban’s assurance that the RDR timetable ‘is unlikely to be affected’ by abolition of FSA must be welcome to supporters of the RDR, so far as it goes. But no-one has yet explained how the Financial Services and Markets Act is to be amended, to transfer functions to the Bank and the CPA, within that timetable. And note that the timing and content of RDR will be a matter for the CPA, which of course does not yet exist and therefore has yet to form a view!

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