View more on these topics

United stand

As we hear more and more diverse opinions about the FSA’s recent RDR interim report, I cannot help but feel that the industry is getting further away from a workable solution to our own domestic problems.

We must not forget that we do have “issues” as an industry, ranging from our ability to manage sustainable businesses to the professional standards under which we operate. In addition to our own problems, we have consumers who are thoroughly confused and disillusioned about what we do.

It is not really the FSA’s job to change the way we do business. Its job is to regulate what we do and ensure that consumers are not disadvantaged. If we cannot agree on simple key issues, we will never be able to unite and develop our industry.

We have two key challenges to overcome – creating a united view and understanding our shortcomingsOne would think that, if all of us who work in the same industry did the same thing, we would satisfy the first point. Unfortunately, however, this is not true.

Some of us give ongoing holistic financial advice, others give advice on buying commoditised products (either from the whole of the market, through a single tie or a multi-tie) and others do both. Neither are wrong, better or worse than the other – just different.

All of them help consumers to “save” or “protect” their futures, just in different ways.

The terminology I use suggests both variations give “advice”, which counters what the paper says in that one is advice-giving and the other product-selling.

Clearly, therefore, the FSA has taken legal opinion on what constitutes advice and what does not, even though I think it will find that, if you offer up a recommendation, guidance or an opinion on something, you are giving advice.

So, maybe the points raised by the paper highlight the future landscape pretty well but one cannot overlook the fact that the FSA makes the fundamental error of using the wrong terminology to express them.

If there were two types of advisers – one who gave advice specifically on selling you a product to satisfy a particular need and one that took a much deeper view of your full situation, then we might get there.

If you then assumed that both use products to fulfil their advice and the client’s needs, then you would be discriminating between the payment options. One with commission from the product and one allowing the adviser to charge his agreed advice fee through the product itself – CAR.

Clearly the “product” approach would require a guided sales process for advisers to follow but we know enough about what we do and regulation to make this work, don’t we?

Surely if we agree on the two key ways we distribute advice, we can differentiate and crack on with the detail. We all like to think of ourselves as unique and different but how different are we today or would we be under the proposals?

Isn’t it our own propositions to customers that make us better or worse (or different) to our counterparts? So, how far away are we really from agreeing the bigger picture stuff? Sure, the detail needs working on but before we say we disagree with the proposals, are we sure we know what we disagree with?

Let us take the example of exams and qualifications. The crunch for many advisers is that many, especially the older or more experienced, did not feel that they should take the exams because they were already qualified. We need debate about whether it is academic or vocational qualifications we need, not whether we need any at all. My view is that we need both.

My second point was around our “awareness” and “acceptance” as an industry of our shortcomings. The FSA was very clear about why it felt it necessary to draft the original RDR paper but when I meet people within the industry who run businesses, “it never applies to them”.

The “sustainability” point alone is key to our future. If we do not accept the signs or, worse, choose to ignore them, we will not fully benefit from what opportunities the RDR creates for us.

Jon Everill is group proposition director at Thinc


Vinke departs JO Hambro

JO Hambro Capital Management European select values and Continental select values fund manager Willem Vinke is to leave after six years. Co-manager Robbie Wouters will run the funds.


MPAA consultation

By Fiona Tait, pensions specialist The chancellor’s announcement of proposed cuts to the Money Purchase Annual Allowance means it will be more important than ever to be able to tell your PCLS from your UFPLS What was in the statement? Not much. The chancellor spared three sentences to inform us that the Money Purchase Annual Allowance will be reduced […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm