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Towers Perrin slams whole-market plan

Towers Perrin claims the retail distribution review has failed to recognise that tied or multi-tied advisers can in many cases deliver a better service than whole of market advisers.

The firm’s Tillinghast insurance consulting business says it is concerned that the desired “end state” envisaged in the interim report contains significant flaws which will inhibit the raising of standards and limit the availability of advice.

It believes the FSA’s emphasis on requiring advisers to select products from the whole market suggests that it regards advice as virtually equivalent to broking.

It says: “This is an out of date and incomplete view. We believe that choosing a product from among competing providers is a relatively small part of the adviser’s service and are concerned that the FSA’s proposals do not appear to recognise or encourage this wider view.”

The firm criticises the FSA for failing to recognise that financial advice can be delivered to a high standard by tied or multi-tied advisers, as well as by whole of market independent advisers.

It says: “Indeed, it is possible for tied advisers to deliver a better service in terms of both outcome and cost. What is important is that advisers have the appropriate skills and tools and that they are remunerated in ways that enable them to assist their clients impartially.

“The quality of advice is increasingly independent of the breadth of the product range available, particularly as product designs become more similar and as wider fund ranges allow extensive choice for the consumer, even within a tied product range or single platform solution.”

The firm believes the FSA’s proposals in the interim report are a backward step compared with the plans contained in the original RDR discussion paper last June.

It says: “We urge the FSA to take a broader view of consumers’ need for advice and how the service they receive can be upgraded and made more widely available.”


Melting pot

Over the past few years, the FSA and the Treasury have been trying to improve the annuity position for those retiring with a money-purchase pension. It is important that they get this right. The at-retirement market is set to explode in size, with Watson Wyatt predicting that it could rise from £13bn today to £49bn by 2017. Most people in this market will buy an annuity with their pension pot.

Harvest festival

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Warning on retirement age

Pointon York global economist Roger Nightingale says it is inevitable that the retirement age will have to rise to cope with the aging population.

India rate cut – more to come?

Kunal Desai, Head of Indian Equities at Neptune Investment Management India’s stockmarket rallied this week following news that the central bank was cutting interest rates more aggressively than expected. Commenting on the rate cuts and what this means for India’s economic growth, Kunal Desai notes that there were two important details in the announcement that have […]


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