I firmly believe there should be a distinction between manufacturers (product providers and fund managers) and distributors (IFAs) and this is something I have advocated previously. We can then work towards a system where advice would be part funded by the state so that those unable to afford fees could obtain quality advice without fear and bias, and those wanting to obtain advice privately for more sophisticated situations can do so.
Removing the manufacturers from the advice process has to be the ultimate aim (the recent FOS figures on complaints highlights this irrespective of the slant the ABI is putting on the situation). This will also make any future regulation of the industry easier. Any development along these lines is to be welcomed.
I am and remain convinced that the FSA has blurred rather than provided clarity to the consumer between sales and advice. Someone at ABC Bank is called an adviser but they don’t advise, they sell the bank’s products.
An IFA or mortgage broker will offer advice, because they are not tied to just one product but, of course, the FSA continues to provide confusion here by the misuse of the word independent, which means something different to what is in the dictionary and what is generally understood by the consumer.
The FSA have wasted much time, money (our money) and caused utter confusion, all to no avail as they are going to have to implement what the EU says at the end of the day anyhow. There are hardly any IFAs in mainland Europe and that is another conformity that is going to happen here soon.
What’s in a name? Very little, if you ask the FSA. The RDR is supposed to be about clarification and this is very important when considering distribution of financial products.
The “bad old days” when advisers were classified as either tied or independent gave an individual a clear sense of the person they were dealing with. Since that time, it has gone downhill as the line has been blurred.