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TSC’s RDR report due on Saturday

The Treasury select committee’s report on the retail distribution review is to be published this Saturday.

The committee launched its review in November and has carried out evidence sessions with FSA chief executive Hector Sants and director of conduct policy Shiela Nicholl and taken written evidence from across the industry.

The report will give the committee’s judgement on whether the RDR will meet its indended outcomes of creating a more transparant and fairer charging system, a better qualification framework for advisers and greater clarity around the type of advice being offered.

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There are 5 comments at the moment, we would love to hear your opinion too.

  1. On the 9th 2011 Andrew Tyrie MP (chairman of Treasury Select Committee) asked Hector Sants (FSA) if he knew the definition of negligence.

    Sants hesitated at this question so Tyrie went on to explain that the FSA is immune from actions in negligence and also immune from acts of gross negligence.

    Tyrie then asked Sants if he knew what gross negligence was. Again Mr Sants hesitated so Mr Tyrie continued in his explanation.

    Tyrie explained that the FSA was immune from actions of negligence and gross negligence and that gross negligence was being recklessly stupid over the outcomes of its reckless stupidity!

    So when Sants says that the RDR will not prevent people from getting financial advice and will benefit the consumer is he correct or is he stupid or could he be recklessly stupid over the outcomes of the FSA’s reckless stupidity? Which is it to be?

    AVIVA Life marketing director David Barral has said his firm predicts by 2013 IFA numbers will fall to 10,000 in total as advisers fail to comply with RDR changes, leaving middle-market consumers unserviced. As a result Aviva wants to grow its tied in-house channel to target 2.7 million ‘orphan’ clients whom were originally IFA clients.

    So Mr Sants appears to have miscalculated by a sum of 2.7 million orphan clients! On the other hand AVIVA has spotted this 2.7m opportunity. So who is being stupid AVIVA or Sants?

    Is it not recklessly stupid for the FSA to disenfranchise in excess of 2.7 million orphan clients from their independent adviser and then suggest to the ABI that RDR will not prevent people from getting financial advice?

    Lenin once said that if you tell a lie often enough it becomes the truth. So we must all be vigilant and hope that the TSC is equally vigilant because if we fail to speak up then we are the ones who are being recklessly stupid over outcomes of the FSA’s reckless stupidity!

  2. Do not hold your breath
    RDR will go ahead regardless because Hector and the gang do not give a toss what happens after RDR,
    He and nicols will still have their jobs, after all who can sack an unaccountable dictator without an uprising or a coup?
    The RDR is an expensive experiment, the outcome of which is far from proven. It is one mans dream. Hitler had a dream too and that was to conquer the whole of Europe. That ended in disaster but not without much collateral damage.
    Take whatever money you have and get out now before the parasites bleed you dry.

  3. The FSA were asked what the average age of IFA’s were and came back with a figure of 48.

    When questioned further this was not a figure for CF30 Investment IFA’s but included all and sundry.

    They were then asked for a breakdown of CF30 by age under Freedom of Information Act and became very defensive and said it would cost a lot to find out.

    As the TSC have already asked for this information one wonders why or have they been telling porkies and don’t want to be found out?

  4. Michael Fallas 12th July 2011 at 9:46 pm

    Can we please ask our MP’s to insist they bring in legislation to ensure they all pass suitable axams by 2013 and have studied all the Acts of Parliament, Hansard and the new MP’s expenses system and if they fail to pass the exams they can not be an MP. Equally can we ask them to be responsible for all the legislation and laws they introduce for the rest of their lives and if they fail or are seen to have brought in poor legilsation then they will pay and necessary compensation due via a suitable compensation scheme and also pay for a free service for those that need help.

    Seems only fair to me.

  5. One would hope that the TSC’s report will also demand from the FSA answers on why it refuses to revisit its RDR Cost:Benefit Analysis. The original estimate of the cost of implementing the RDR was £600m, yet that figure appears now to have spiralled upwards to between £1.4 and £1.7Bn.

    The inference must surely be that the original figure was either plucked from the air or based on faulty data or was deliberately and massively understated because of the barrage of resistance that a cost range of between £1.4 and £1.7Bn would provoke. As for the benefits side of the equation, these are at best unproven and at worst completely speculative.

    Yet the FSA remains obdurately resistant to revisiting the issue of Cost:Benefits, presumably on the basis that because the train has now left the station the FSA is unwilling to face the embarrassment of the climb-down that would be involved in revisiting the whole proposition. So the FSA’s unspoken position is instead that the only choices open to practitioners are either to get aboard and get with the programme or bugger off into the wilderness.

    No one’s saying that there isn’t scope for standards to improve across the industry. The big question is whether the sledgehammer ‘fix’ of the RDR is the best way to go about achieving those improvements. I hope the TSC will recognise this important distinction.

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