Some might say 200 tabloid journalists losing their jobs is best defined as “a good start” but just because they are sometimes unkind to us we should not commit the same error of judgement.
When the Financial Services Act took effect in 1988 we had more than 250,000 registered to give advice. More recently, this diminished to 60,000, with about 20,000 of those being independent, although accurate figures are hard to find – even the FSA is vague and that is something that has always concerned me.
This reduction in numbers would generate massive press coverage if in any other section of the financial services industry and yet little has been said.
Is this because we are seen as unimportant and why the Money Advice Service went for the phrase “free advice”?
I always say we have got the compliance we deserve as too few engaged at the early stages and sent the people we did not like or felt were not effective into compliance roles.
This is no longer the case but the damage it did is still being felt. As the new regulatory system beds in, we need to ensure we do not remain silent.
I was recently critical of the FSA’s risk and suitability conference and the regulator subsequently informed me the feedback was very positive, although, given the com-ments made to me by other attendees, I suspect that came from a small sample.
That apart, the FSA did enter into dialogue and it is clear it wants to engage as it gave the impression that few trade bodies offer any alternatives to its various strategies.
At a time when Aifa should be leading the debate, it remains in contemplation. This is not helpful and I just hope that the final strategy appears in time for consideration and not after the retail distribution review is set in stone.
There is now less than 18 months to go until the RDR and yet many have still to grasp the scale of the change the move from commission to advisercharging will deliver.
I met an IFA from a bigger firm recently who told me adviser-charging is just a name change. In a rare occasion, I was momentarily lost for words. I then suggested to him that, in reality, the clients signing to accept AC could well have an impact.
By the evidence of his reaction, he had not properly contemplated adviser-charging in practice, in particular, the point that it is highly likely that providers will require the client’s written authority to make a deduction.
Nor was he aware of the proposal to withhold payment until the cooling-off period has expired or that operating solely on advisercharging from providers may impinge on his independent status.
His reaction mirrored mine when it was suggested to me that John Prescott’s calls may have been hacked. Like me, he simply could not understand why anyone would do that. But in this IFA’s case, the lack of cognitive deliberation made him very similar to the lord from Hull, talking before he really understood the situation.
Robert Reid is managing director of Syndaxi Chartered Financial Planners