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Ukip calls for RDR to be scrapped

Godfrey-Bloom-UKIP-700x450.jpg

The UK Independence Party says the RDR should be scrapped as it has made financial advice the preserve of the rich.

Ukip MEP and economic and monetary affairs committee member Godfrey Bloom, who is a former IFA, says banning commission payments to advisers is wrong.

He says: “Ukip is against the RDR on the basis that it is not libertarian. We believe you should be able to make any arrangement with your financial adviser that suits you both. It is no part of Government to directly interfere in liberty of contract.

“The lower and middle classes will not have access to financial advice and it will be a preserve of the rich, which is not what the Government wanted.”

Bloom also hit out at the Government’s state pension reforms, which will allowing those who contracted out to build extra state pension entitlement up to the proposed single tier payment of £144 a week, alongside their contracted out sums.

Savers who were contracted in will see future benefits capped at the £144 level.

Bloom says: “Their money has been confiscated and nobody seems to care. Those who contracted in to the Government scheme paid extra national insurance contributions and they will receive no benefit from it.”

Jackson Wealth Management managing director Pete Matthew says: “Reversing the RDR is not sensible. It was never going to be perfect and there is always collateral damage with something this big.”

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Comments

There are 66 comments at the moment, we would love to hear your opinion too.

  1. Reversing RDR would be madness. Adjusting and improving in the light ifd it being the dogs dinner some of us repeatedly said it was becoming is another matter. The commission ban is here….. live with it. we just need a good factoring method for regular savings (and protection if it is brought in to line with investments and its own commission ban)

  2. Stephen Rowland 16th May 2013 at 9:58 am

    Well UKIP did it with Europe & Immigration regarding getting the Government backed into a corner & at least discussing the subject (many would say because they had too) – now maybe they could do the same with this elitist RDR!

    Any IFA not looking after wealthy Clients or sitting on large trail commission (looking suspect at this time for stealing by FCA) – should vote UKIP!

    Other parties seem past caring & love the status quo / mess we already have, & seem unwilling or bothered to do anything about it!

  3. They’ll get my vote.

    With reference to the comment by Pete Matthew – you also get collateral damage with a Nuclear Weapon – but no one suggests they are used but if they are the clear up lasts for many many years afterwards and the fallout hits those not necessarily the target.

  4. I might not agree with them on Europe, but they now have my family’s vote !!!

  5. Another good reason why not to vote UKIP

    Scrapping RDR would be a disaster particularly as so many firms have made adjustments already. What is needed is sensible adjustments e.g. forcing providers to allow adviser charging on existing policies particularly if those providers are switching off trail commission, would be a good start.

    The concept of RDR and seperating adviser charging from the product is sound as long as providers are forced to adhere to adviser charging on legacy policies. Otherwise we are going to see considerable amounts of transfers or indeed clients put in detrimental situations when it comes to advice. Most of the problems with RDR are provider based and not adviser.

  6. Going Down with my Ship 16th May 2013 at 10:15 am

    Great article and spot on, the RDR should never of gone ahead, but Mr Bloom like a lot of Politician’s is too late.

  7. Entirely agree that RDR should be scrapped. It was always a stupid idea. The people who came up with this three headed monster have all run away leaving the mess for someone else to pick up. Progress? No, it really is a complete farce.

    They have my vote!

  8. Sense at last! I can live with RDR its a level playing for all BUT why not work with a level playing field with commission? No provider bias could easily be acheived with a set commission structure why reinvent the wheel?

  9. Very sensible. Give the CLIENT the CHOICE. Full disclosure and a 3% cap on commission.
    Level 4 qualification minimum.
    Simples and a saving of 2.5 BILLION!!
    RDR…. What an idelogical mess based on a 3 for and 2 against vote by unelected and unaccountable individuals who left prior to the mess they created being implemented

  10. Terence P. O'Halloran 16th May 2013 at 10:23 am

    Here is a man who speaks my language and understands the problem.I agree with every word, and have said the same many times.

    Oh for a house of commons full of such people. Not politics, common sense.

  11. I was against a commission ban and argued publicly for a cap for 5 years. Nearly all the posters wanting RDR reversed are’ posting anon. Perhaps if they had replied (like I DID) to the RDR consultation papers we might have been listened to. I do NOT want to see a reversal of RDRwith all the work that would entail. If I had a Tardis and could go back and change the past, that might be another matter. Jnfortunatley the neareatIhave to a Tardis has a U init.

    Too late as Peter Herd says. Let’s get on with the job and not have anymore change for 5 years please. How can anyone plan if the rules keep changing?

  12. Lots of “they have my vote!” above.

    Hmmmm its almost as though thats what they (UKIP) wanted, but surely not! Would a politician stoop to such measures by touching on a very raw nerve to gain some votes with the IFA community?

    I wonder why he left the IFA world to become a politician?

    (strokes his beard with a thought provoking look on face)

  13. “Ukip is against the RDR on the basis that it is not libertarian. We believe you should be able to make any arrangement with your financial adviser that suits you both. It is no part of Government to directly interfere in liberty of contract”
    That statement alone is enough to make me vote UKIP. The other parties could not care less about the lack of even basic human rights within the IFA community. Mark Garnier makes a few sympathetic noises now and again but the reality is he could not give a toss, it is all kidology.
    No doubt if UKIP are elected, they too will go back on their manifesto, but we live in hope that someone, somewhere will bring the Leviathan under control and force them into treating advisers with the same accord as every other member of society, with particular regard to the longstop.
    Every adviser should let his MP know that, unless the FCA is made accountable we will vote UKIP.

  14. @nicobobinus
    The tories did the same to gain votes
    They said they would abolish the FSA, they did and replaced them with the same monster.
    “Be the liars and cheats called labour or tory (or UKIP) they will feather their own nest and lie to the end” “Lewis Grassic Gibbon”
    I will still vote for them as I am so sick of the old liars might as well see what the new ones come up with.
    Either that or I see no point in voting at all given that the choice is between Cameron or silliband.

  15. Pity UKIP didn’t make any noise before. It’s easy to stir up feelings after an event when there is absolutely nothing you can do about it.

    I share the same cynicism as nicobobinus (above).

  16. Go UKIP !!!

    RDR has nothing to do with re-education or commission bans. It is everything to do with reducing advice/advisers, so called miss-selling (I say bad products) and collection of extra tax revenue.
    Ever since we have been forced to complete the stupid RMAR returns they now see us as cash cows to fund their own and the governments stupidity and costs.

  17. Newsflash. UKIP promise to support free accountancy and legal advice for all and money off coupons at Tesco, and any other crackpot scheme they think will garner an extra vote or two.

    It doesn’t seem to occur to UKIP or some others who have posted on this site that in order to require financial advice you first of all need money. The people to whom Mr Bloom refers are probably much more in need of reducing their debt, rather than spending money they haven’t got on financial products that will do more for their adviser than it will for them. Sorry if that sounds condescending, but the truth is often unpalatable.

  18. The UKIP words are cheap and opportunistic, and designed simply to attract disaffected advisers. . More to the point what would they propose as the alternative. I do not like what RDR has done to the IFA but it will take a great deal for me to run with UKIP. They will not get my vote

  19. Oh Please! Reverse RDR after the £m’s that advisers, BoS, providers have spent getting us to here! Why would we even consider this.
    Its here, live with it.
    Its not perfect – but it is workable.

    As an industry we need to move on and make the best of what we have.
    Sorry if this sounds harsh but its all just tiring now!

  20. Godfrey is not a ‘Jonny Come Lately’ I’ve met him on occasion and he’s been saying much the same since RDR was merely a thought in Callum McCarthy’s puddled brain when he obviously must have been under the influence of whiskey at Gleneagles!

    RDR (even if it was well meaning and consumer friendly) is interference in markets and will always fail as it does in any sphere of commerce of course it is right that the parties to any transaction decide the basis of the transaction and not a Regulator, Governement or Pro RDR Adviser – thats what markets do.

    RDR was practiced prior to January 2013 with varying degrees of success by advisers and the market determined whether they prospered or not – it is funny that those that did so preached to everybody else how they should work. They could continue to do so now even if RDR was scrapped – guess what the market would decide whether they succeeded or failed, .

    I am tied of being told by third parties how I should suck eggs as a consumer and an adviser and I am certainly tired of other advisers preaching their way is the only way – Let the Market (consumer of the product or service) decide what have RDR preachers got to worry about ?

    MMR is much of the same and will do damage to consumers in the same way as RDR

  21. Customers know we are not recommending a product type because one type pays more commission than another type. That gives them more confidence in our service. Many of our clients also prefer to pay our fee direct rather than have the provider deduct it from their investment(s). But when providers have established their own distribution models, and all the smaller firms have gone out of business or been taken over, and when we are left with four or five massive financial firms catering for all a customer’s financial needs, we will be seeing the end result of RDR. It will be completely different to what we see now…

  22. It is never too late to reverse stupid measures which were poorly thought-out and have already created detriment to millions of consumers.

    This focus on charges, cheapest and best is responsible for cornering the market and denying advice and products to the very consumers that need them.

    Bring it on. Those advisers that did or have changed to an RDR model have the choice of remaining or returning. Their personal views should not influence what is best for the UK.

  23. Advice is unaffordable for 90 to 95% of the population and Pete Matthews thinks that’s collateral damage, peripheral?
    If you miss the market by over 90% how can that be regarded as minor? It’s a bit scary what some people regard as an acceptable error rate.

  24. RegulatorSaurusRex 16th May 2013 at 11:54 am

    UKIP should go one further, regulators should be told they are extinct in order to avoid further damage.

  25. If I was one of the thousands of bank advisers who have recently lost their jobs due to RDR I would be now planning to vote UKIP

  26. exactly anon@10.08
    It is ok for those advisers who are still in business and remain largely unaffected and happy with their lot.
    Others were not so fortunate. Why should they vote for labour or tory, who stood by and let it happen?
    Abu Qatada has more rights than a uk adviser. Vote UKIP

  27. RDR is here – we can’t scrap it now just because it suits a few advisers or even product providers who have been too lazy to adapt their systems.

    As I said earlier what needs to happen with RDR is for the regulator to force product providers to allow product charging on existing legacy business particularly if those product providers are going to switch off legacy commission.

    There is nothing in the rules that prevents adviser charging on existing business as far as I’m aware.

    The reasons why the system isn’t working at present is not because commission has been banned is because product providers are not allowing adviser charging on all products including existing.

    We also need to stop stupid people like Steve Webb of The Pension Regulator coming up with stupid ideas of banning consulting charging on occupational pension schemes. Surely this goes against RDR as all charges are meant to be agreed in advance.

    Can somebody please sit Steve Webb down and explain to him how RDR works as I am not prepared to work for FREE!

    And before anyone starts there is no such thing as FREE ADVICE can somebody please tell that to the person running IFAbroker.com

    Rant out 😉

  28. UKIP now represent me at county council level, they say they have ‘common sense’ and this is good. But are they an opportunistic shower that speak for the majority in my ward, not the posh boys leading the coalition, and not the posh boys leading the socialists, are they a one policy pressure group or are they the breath of fresh air that politics needs? Who can tell.
    ‘Common sense is the collection of prejudices acquired by age eighteen’ stated Einstein, so the common sense shown by UKIP shows their immaturity.
    If Mr Bloom stated that commission levels should be capped, but education reforms stand, it may help. Max 4+1/2 anyone?

  29. @Peter Herd

    I was referring earlier to people just like you Peter !

    You just cant help yourself can you !

    Oh and by the way are you really that naive, anything can be scrapped although it is more likely that it will be forced on the basis of restriction of trade by the likes of the OFT

    At which time you can carry on with RDR in the same way as anyone else that wishes to !

    Oh I just remembered that’s what happened prior to January – how funny !

  30. @ Derek, we argued about RDR for about 5 years now time to move on please. Improve where we are, too late to go back.

  31. @Phil
    It is not too late to go back
    surely no one can regret having upped their qualifications?
    If their clients are happy to pay fees- good.
    They can advertise these details on their website & literature.
    Others can go back to the way they operated pre Jan 2013, they should tell their clients about this.
    Derek has already explained that market forces ie the consumer, will decide if such companies thrive or fail.
    Simples

  32. Phil, it most certainly is not the time to just move on and disregard the impact of RDR on many peoples lives. It is disrespectful to the thousands who have needlessly lost their jobs during the midst of a wider recession.

    If you don’t complain (and consistently if needs be) then nothing is put right. Consumer choice has been removed in the belief that people were not competent in making a decision for themselves on this aspect of their lives.

    Now its here (and remember we didn’t have any choice!) we can talk with practical insight into its mechanics and impact, hence it is the best time to discuss and debate such things!

    Anyway, who said consumers didn’t want commission-based principles? The consumers or a handful of know-betters in the corridors of power within the UK and EU?

  33. Stephen Rowland 16th May 2013 at 2:33 pm

    Is it that the RDR Elitist among IFA’S are worried that by going back to pre RDR terms – there perceived upper hand would fail to prosper once everything potentially goes back to the status quo?

    I bet they generally aren’t worried about middle england which is what the proposed RDR was supposed to enhance – REMEMBER!

  34. @ Peter Herd
    Save the blood pressure Peter. It’s like knocking your head against a wall with some of these people.
    As my old Grandpappy used to say “In the end it’s found in the last barrel”

  35. RDR is not for fairness or justice but who is the beneficiary?
    Choice is always a great leveller and informed choice is best.
    Easier would have been making the commissions/fees the same no matter who the provider was.
    I don’t believe the advisor market will get them into power as there not many left.!

  36. One final point,

    I am amazed that so many RDR preachers who purport to work in the financial markets/economics are anti free market – doesnt make sense to me. Why do so many tell everyone else how to work ? I couldnt care less

    Seriously let the market decide not the Government or Regulator.

    And as I previously stated, MMR is another accident in waiting !

  37. Harry, Peter & Phil could form an Elite partnership.
    They could advertise themselves as being above and beyond the rest of the adviser community.
    They may even call their firm “Pargon”.
    The rest of us could concentrate on advising instead of all the crap the regulator throws our way.
    Again, market forces would determine the success or failure of each business model.
    As anon@2.33 says -what are they afraid of?
    After all it would be a strange world if we only had Waitrose with no Aldi, Asda or tesco.
    Us plebs would have to grow our own.

  38. I’ve just read in another publication that the Harlequin debacle could cost financial services up to £100 million in compensation claims through the FSCS.

    So for those that want the clock turning back can you please explain to me how it is in the best interest of clients to still have commission. Particularly when Harlequin were paying commission rates of up to 30% so I understand. If that’s not product biased I don’t know what is.

    As I and many others have said banning commission is not only in the long term good for financial services it will also improve both product design and the service of providers. The only way product providers and manufacturers will have to compete is to provide better products if they don’t they won’t get recommended.

    So instead of harping back maybe those that keep going on about commission should think about client’s best interests and making sure that clients can access funds from products to pay for advice. E.g. adviser charging on all products including legacy.

    After all what’s the difference between adviser charging and commission away? answer disclosure – as you need a signed fee agreement upfront for adviser charging – simple.

    If you’re going to argue against disclosure then you shouldn’t be in the industry anyway!

    I actually think that RDR is having some real benefits to consumers e.g. lower management fees, and clearer disclosure of platform fees. As time goes by I can really see IFA’s been in an excellent position to push these prices down for consumers. As I have said before the Tesco’s moment, fun providers are after all our farmers and suppliers!

  39. As to regards to Derek Gair comment I am fully willing to participate in a debate I just have a different opinion to you. I respect your opinion and position and I hope that you would do the same after all we are both professionals.

    Some people on here particularly when posting anonymously can be over the top with their comments. My advice is would you say it to my face!

    I like a good debate but back in January some people’s post on here got way too personal, it isn’t funny and it is not right.

    My thanks to Chris and Harry for their supportive words.

  40. @ Peter
    Who is Chris?

  41. I haven’t changed my tune I have just moved on. RDR was wrong and so was the commission ban, a cap would have done, but it has happened despite pour best efforts and now there are netter things to do than spend 4 years reversing it so we can have a commission cap instead.

    I respect Derek’s opinion, but Disagree with going back and if anyone wants to criticise me or Peter have the decency to use your real name please than we can check that like Derek and I you actually put your head above the parapet and replied too the FSA discussion papers. We did and were ignored so it is YOUR fault we are where we are, not Derek’s or mine.

  42. @Peter

    The longest over the top comments have come from your posts because you don’t agree with the other people posting.

    As for commission I don’t see what Harlequin have to do with that – it was the whole product at fault investments in foreign property that hadn’t been built yet!

    Have you never been paid by commission? It is not the commission payment that is at fault it is the greedy unscrupulous ‘Advisers’ who give wrong advice to get large commissions from wrong products.

    Instead of punishing everyone by banning commission then when ‘Advisers’ behave badly such as the Harlequin debacle then punish them severely not everyone else i.e. us that are left to pick up the £100K tab.

    Commission is just another choice that can be offered to clients and discussed properly upfront.

  43. I meant Phil Castle and Harry Katz

  44. YouPeter Herd 16th May 2013 at 5:51 pm

    David

    First off I would agree the commission isn’t the fault it is the fact of the adviser who chooses to hide the commission or choose a product that has higher commission that is at fault.

    The problem is even if you introduce a cap on commission you still have a confusing proposition to the consumer and many advisers will simply choose not to disclose it.

    Most of my financial career up until 2007 was in the bank and building society arena and I can say that there were advisers who chose not to disclose commission by simply hiding the last page of illustrations. I personally have always found the last page of an illustration easy to explain but many in the industry in my experience have chosen not to disclose.

    Now I know many advisers would state that there are illustrations given by both the majority of advisers, product providers, even been disclosed in suitability letters. But the fact is clients do not always read these documents and often miss the figure that is being buried in a load of paperwork.

    The reasons why banks are getting out of advice is that they are totally unable to be upfront about what clients are being charged for e.g. fee agreement signed before work is carried out.

    It’s interesting how many people who are so against RDR are really arguing not for client choice because effectively you can building remuneration packages to products. What you are arguing for is the right to hide the commission or fee. That’s the reality and that’s why we ended up with RDR.

  45. Harold's Ghost 16th May 2013 at 6:24 pm

    Phil Castle, I appreciate your capping of commissions idea was in the right spirit, but there are frankly times when it is right to take more fees from one product than another when it benefits the client without the adviser taking any more overall. Commission caps would have just made this a pain to do.

    The RDR discussion has been done to death. For the likes of UKIP’s stance and Derek Gair, I confess to being confused as how it is anti free market?

    The free market is about freedom in prices and what is offered in exchanged

    The product fund or adviser can STILL set their charges/fees as they please and adviser fees still can be paid via products. The consumer can decide if this is acceptable. The ONLY difference is that each component of the service must be transparent and agreed. Is really that a bad thing?

    On the one hand If the adviser is claiming to be independent and acting for the client there should not be any other benefits of distributing one product over another

    On the other hand, If the adviser is tied in any way, there are plenty of options for each component of cost to be defined in any way the links in the chain of distribution agree to so long as the end user is prepared to accept the overall outcome and the componets a separately shown (the free market still works)

    Whether a fee from an investment comes from a commission or fee therefore makes no difference (any argument to the contrary is in cloud cuckoo land or down to Ponzi accounting) Before anyone asks, I don’t just deal with wealthy clients.

    If jobs were unfortunately lost on the basis of this element of RDR alone (and I am not saying this is the case or not) I suspect can only have been because the accountants in charge believed they could not get away with the same margins by being transparent.

    I will agree that some aspects have been dealt with in the wrong way such as the HMRC approach to adviser fees from Bonds or the treatment of legacy commission, but (as pointed out by other posters) it is those specific misapplications that must be criticised, not the banning of commission.

  46. Harold’s Gost
    Your comments carry more weight if not anon !

    Your comment about capping are correct.

    I would have thought that you would understand market economic principles – Free ‘unfettered’ markets means freedom of choice as well as price it also means unrestricted trade. (funnily enough, a commission cap is a restriction of trade in the same way as the regulatory interference that is the RDR and the incoming MMR) Which is why the OFT will ultimately get involved. It is for the grown ups involved in the transaction to decide the basis of the relationship in every respect. The market will then decide as it does in the wider commercial arena

    Peter Herd

    Look I have nothing against you or your opinion its your patronising attitude that gets up many peopl’s noses. Debate – bring it on Peter I’ve chaired,made speeches and participated in many over the years ! I would also be careful about passing judgement on other people’s websites when I recall a few months ago your’s tried to pass you off as a CFP (an error perhaps which has now been rectified)

    Listen, anyone still involved in this industry is RDR compliant and presumably making a living – that is not the point – it is the fact that regulatory and government interference in the market is destroying the market !

    I say again – let the market decide – Peter Herd and all the RDR preachers can carry on as they wish what is to lose by that ?

  47. Seriously? You would vote for UKIP over this? Total Stupidity!!!

    They are a xenophobic party catering for any niche issue they can get their hands on. They don’t actually care about it, they just want to get in power like the rest of the politicans out there. Except they have no idea of negotation, all or nothing, which isn’t the way to do international politics.

  48. Commission caps are still commmission! They stil require the take up of a product to be paid! Thats not advice, thats spending hours convincing a client to buy a product just so you can get paid!

    Over 60% of the population have debt or no emergency fund, what fianancial advice do you think you coulod give them that CAB or MAS couldnt???

  49. @ matthew

    Commission is just a form of remuneration. If you are a good person with the best interests of your clients at heart, what’s the difference between spending hours selling your services and hours selling a product other than mis-guided vanity?

    I have a mortgage (debt) but I also have substantial savings (pension). I suspect an adviser would help me more than CAB or MAS. People can be income poor but asset rich, they can probably be helped more too. I’m sure there are plenty more examples.

  50. @ Matthew and Derek – As I say, I don’t see any point turning teh clock back now. BUT
    A commisison cap woudl have worked. As an example, we used to quote a fee for annuity work and a different fee for drawdown/USP. The fee was what it was….. it was then offset by any commission paid. The way we had structured it meant our decisions were not influnced by commission (or lack of), nor by annuity v USP.
    As an example we used to quote 1.5% of the fund value BEFORE PCLS with a minimum of £420. any commisison received was offset against our bill and if we reccomended taking the PCLS and the client asked for advice on that, we halved our advice fee for investing the PCLS from 3% to 1.5%so we only charged what we and teh client felt fair.
    Commission on annuities therefore was NEVER higher than 1.5% or on investments 3%, but our total charge to the client based on work involved and FEE could range anywehere between 10% and 0.5% depending upon fund sized involved and discounts given, but the commission was capped so it could not influence decision making as to which provider to use. If he provider paid NO commission, it made no difference to us as our fee was still the same to the consumer, but we’d have to take in to a count the effect of the charge effectively coming from a PCLS which was tax free!
    Anyway it’s all water under the bridge as I don’t expect them to reverse RDR.

  51. @Matthew- We didn’t have to seel a product to get paid as being IFAs, we not only provided a FEE option, fee offset was the ONLY option. Commisison only in our case was NOT.
    We quoted a fee for reserahc and advice and a seperate fee for implementation and still do. For us, nothing has changed post RDR EXCEPT some providers have robbed the consumer by stopping paying commission which would have been sued to offset our fees, i.e. clients with guaranteed annuity rates and so on. RDR got it dreadfully wrong, mainly due to unintended (but notified) consequencies as Derek Gair and many others including me pointed out the flaws, but too many adviser failed to respond to discussion papers or hassle their MPs and have got what they deserved. Personally due to changed circusmances, I agree with Peter Herd for we we stand now, not where we stood pre RDR, I said I’d argue up until 31st Dece 2012 and did so, but it is in my opinion pointless arguing for a reversal. Improvement maybe, reversal NO.

  52. Forgive me for being simple, but I thought the comments IN THE ARTICLE were all about choice.

    Giving back to the people who want Financial Advice the choice as to how they want to pay for it. Not as it appears a diverse choice of just how an adviser wants to pay for the advice they give.

    I am for choice but not actually a supporter of UKIP.

    I was concerned about Harry Katz’s poorly thought out comment at the beginning – something along the lines of “in order to need financial Advice you require money in the first place. Well done Mr Katz – commission hungry salesman of the year award goes to you.

    Having saved a client £600pm by just doing an income and expenditure review, rejigging her mortgage and protection etc., this young lady was so grateful she paid me with a case of wine. All of her advice was paid for by commission and proc fees and her choice to pay for the case of wine.

    Did that a few years ago when she had no money, now she has a couple of cash ISA’s, about £10k in a Stocks and Shares ISA, has paid about £30k of her mortgage (on my advice), about £8k in a pension (on my advice) and is very content with how it is all going.

    We discussed RDR the other day at a review – over dinner and a bottle of wine and when I worked out for her how much I would have charged her for the original advice she commented that she would have never had done what she did because she would have felt she could not have afforded it.

    We raised our glasses to commission (all of which was disclosed) and to choice. Lets hope it returns and lets hope Mr Katz realises that it is not just his function to make the iceing for a cake, but that sometimes he has to make the cake first.

  53. @Phil castle

    “Improvement maybe, reversal NO”

    I believe the TV program ‘Mythbusters’ proved that you could polish a turd after all so we’ll wait and see…

  54. @ Darren

    Amen !!!

    BTW although I’ve said it before many times, I think the OFT may well do a job on the RDR in the fullness of time !

  55. @Grey area – On lump sum business, there is no need for commission, so a ban isn’t really a problem there. It was/is and remains so with regular savings, whether that be pensions and investments. The ban has been put in place after 5 years of debate. I argued for 5 years that there needed to be some form of factoring put in place BEFORE any ban on commisison came in at RDR. It was ignored. The logic behind arrnaging some form of factoring still stands and would not require a reversal of the commission ban.
    The suggestion for factoring was that as with the spreading of FSA fees and sometimes PI fees over a year via Premium Credit, this was allowed for clients to meet their advice fees and was facilitated by either the FSA arranging it or trade bodies, thus removing the (perceived) commision bias (which was not proven to exist in practice).
    This could still be done and coudl work where Consultancy Charging looks likely to be banned, so that the employee can chosoe to “pay for factored advice” OT the employer can pay OR they can share the costs without falling below the AE minimum.

  56. Julian Stevens 17th May 2013 at 7:16 pm

    Scrapping the RDR is an unworkable proposition that, in itself, wouldn’t fix the ills of over-authoritarian, interefering and excessively costly regulation. The basic precepts of the RDR remain (IMHO) difficult to challenge ~ better qualifications, CAR and a defined service proposition. It should have been left at that.

    The main problem with the RDR is that once the FSA got the go-ahead to set it in motion, it got completely carried away and bolted on a hundred additional requirements that were never part of the original plan. Because of the FSA’s near-total lack of accountability, no body existed to challenge what it was doing and stop it from creating a regulatory stew of what we now find has reached horrendous proportions.

    As I see it, UKIP should be pressing not for the RDR to be scrapped but for the creation of an Independent Regulatory Oversight Committee with the unassailable authority to say to the regulator: This is wrong and you’re not going to do it or This has become a total mess and a completely unwarranted restriction of trade that you’re going to have to revisit and unwind those elements of it which were never part of the original plan and which you had no right to bolt on after being given the go-ahead for a prospectus that you’ve since totally alterted, embellished and corrupted without reference to any outside party.

    At this stage in the game, the RDR cannot be dismantled and scrapped. To do so would cause as many problems as it would solve. The primary issue is lack of accountability. That is what needs to be tackled head-on by an Independent Regulatory Oversight Committee.

  57. Harold's Ghost 18th May 2013 at 11:12 am

    @Derke Gair You ask why have posted ‘Anon’ and in the next paragraph you use an ad hominem about a mistake on Peter Herd’s website The comments I make can stand or fall on their own merit. A nom de plume gives others a consistent identifier while allowing me to speak honestly and unfettered by outside politics.

    On the Free Market: Though the word is often misused, a ‘profession’ is not any job or business, but one that also specifically seeks to serve the interests of the end user. The point is that most Professions have restrictions that may be contrary to a pure Free Market in order to avoid conflicts of interest and ensure best practice.

    As IFAs we state that we are acting on behalf of the client instead of product providers, but the evidence shows that product providers influenced distribution through commission levels. Hence commission was shown be a real or potential conflict of interest – even if it only applied in a minority of cases. If we ignore the dreadful stance on Bond commission by HMRC which is not a necessary outcome of RDR, I have not seen either or real or theoretical example of a negative impact on caused by taking an agreed fee instead of a the equivalent commission on lump sums.

    That leaves factoring for regular investments where there is no significant lump sum. Mentioned by Phil Castle. Though Dareen and his client ere “toasting” taosting commission, remober all of this including factoring has to be paid for somewhere in the contract fees and if not it was shifted (unfairly) to others

    If you want to factor, use some mathematical imagination For example, the client can pay for advice out of the early premiums and pay less out of the later ones to get the same result based on an assumed rate of growth.

  58. UKIP are a breath of fresh air in British politics at the moment.

    Love them or loathe them, broadly speaking what they say makes perfect sense and more importantly, resonates with the majority of public voters.

    You only have to look at our weak, dithering current Prime Minister and the embarrassing u turn and concessions he has had to make over this business of the EU referendum; to fully appreciate the impact that Farage’s Party is having on mainstream politics.

    Yes, of course UKIP are unlikely to be anything other than the third largest political Party, BUT, they have influenced both UK politics and policy far more than the Lib Dems ever did and in a very much shorter timescale too.

    Well done Nigel, you’ll certainly be getting my vote

  59. Julian Stevens 18th May 2013 at 12:45 pm

    Suggestions about UKIP being xenophobic are, I think, misplaced. I recenly attended a very interesting seminar hosted by JP Morgan, for which they’d flown in three very good speakers from New York. One talked about the recovering US economy and made the very pertinent point that it’s not economies that drive markets but the other way round. Somebody asked her what factors she thought could dampen or derail the current recovery. Her answer was a clampdown on immigration, because so many of the people with whom she works are not US born but bring immensely valuable insight and intellectual vitality to what JPM does and thus to the US economy as a whole.

    I cannot believe that UKIP would wish to obstruct the contributions that such people can and do make to the UK economy and nor would I wish them to. But a clampdown on freeloaders who wish to migrate to the UK primarily to avail themselves of a state benefits system to which they’ve contributed nothing seems to me entirely reasonable and hardly xenophobic.

    Is it xenophobic to stipulate that those who wish to emigrate to the UK should have a job lined up, some capital behind them, a sponsor, no criminal record, a reasonable command of the English language and at least some knowledge of the UK’s culture and customs? Or that before being eligible to claim any benefits from the State, they should have made at least five years contributions into the system? I don’t think so.

  60. The powers that be had an opportunity to give us a regulator who with a maximum commission cap could have saved this industry from the lunacy we have had to go through in the last 25 years ,but then that would not have created the enormous gravy train for administrators and civil servants so beloved of politicians and thir lackeys . The RDR is here to stay now and fee based advice will not go away,but that must not stop us all working to change its inequities and downright stupidity. We need to engage with those who can effect change , if they will let us!

  61. Why not go halfway. The client can have the choice pay fees or pay commission

  62. Well said that man!

    Nannying the public leads them to rely on what “they” tell them is OK rather than looking out for their own interests. If the personal pensions market is anything to go by, a RDR is likely to result in fewer financial products being sold, which will leave many unprotected and under-invested for their futures.

    The reaction of the political class today seems to be to introduce regulations whenever a problem arises whereas fixing the market or legal or regulatory failure would be the better option. One begins to doubt if those who rule us so incompetently have the skills and knowledge to govern us sensibly.

    As to the flat rate pension, Godgrey Bloom is right. Those of us who have worked all our adult lives and paid in for the additional pension benefit have been disadvantaged. not only did we pay in for our benefits we now have to pay, through taxes, for additional benefits for those who avoided contributing. Whether they were unemployed, overseas, cheats, in gaol, living off dividends or putting their opt-out cash into personal pension plans they did not pay but get the benefits. I paid as did millions of others and we have to pay again.

    Actually I started work before adulthood, but OK I did not pay “graduated pension” contributions until my late teens and I still have the certificate to prove it.

  63. UKIP have my vote. RDR is ruining people’s lives. No adviser is helping the younger people save £100 pm and no funds are being built up, this is a ticking timebomb for future generations. All people do now is move lump sums about. the only people for it are IFAs sitting on large amounts of trail.

    Does it really hurt anyone if an adviser tells someone to save into an isa, pension or take out income protection? Surely its better than buying a 1k handbag on a credit card but one can be done with no regulation and telling someone to put money in an ISA is too complex and you can’t make it viable.

    Surely commission should be allowed on regular premium business?

  64. Chris Macdonald 20th May 2013 at 1:07 am

    More bonkers comments from the man who doesn’t see the point in employing women of child baring age.

    It’s too late, the ship has sailed and with it his chances of ever getting elected.

  65. Having just spent half an hour printing off endless reams of product provider paperwork (why are all documents 20 pages long?), it occurred to me that, as the Adviser, not only do I take accountability for the advice, deal with the delivery of the business and the time and expense that it entails, but I then have to ask the client to remunerate me!

    There is something missing here…Distribution costs on the part of the provider.

    There is a fundamental flaw in the whole process!

    ..And before anyone says it breaks impartiality rules or you still had that when commission was about..Two wrongs do not make a right. It wouldn’t happen in any other walk of business life and if we are to focus our concerns in any area, it should be this one!

    Thank-you!

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