I see said the blind man!

I see said the blind man!

Posted by: Simon Mansell

Too Clever By Half

Again, we are in danger of complicating matters in an attempt to reduce confusion. 1. All advisers should be authorised. 2. Only whole of market can claim to be independent. 3. Many independent advisers specialise - this needs to be accepted 4. All a potential client needs is a sheet highlighting whether whole of market or otherwise, what areas of expertise the adviser/firm has and what the remuneration basis is or can be. What could be simpler?

Posted by: Alan Lakey

Divorce Sales from Advice

The world has shifted but the FSA hasn't got the guts to make the calls that need to be made, mainly because they will really really annoy the banks. Firstly, commission needs to be removed completely across all products, the FSA should set a cap of customer agreed remuneration that the adviser can draw from a product, for example a 5% initial fee and a 1% annual fee. This cannot be changed, influenced or subsidised in any way by the providers. This instantly creates a level playing field whereby no provider can influence the adviser other than the quality of the product on offer. Secondly any adviser that is not independent can only be paid a fixed salary with no sales bonus. It is unreasonable to expect independent advisers who have to earn their living by charging a fee for their advice to go up against tied advisers who are paid based on volume of sales. Restricted and Independent advice will work just fine but only if the playing field is levelled across the entire industry and the only way to do that is completely remove commission and sales based incentives. Ask a bank based adviser whey he doesn't recommend fund switches in the massive unit trust book he has, the answer is quite simply "because theres no money in it for me", thats because they are sales people not advisers. This MUST change going forward. The hard decision that needs to be made is to completely divorce “Sales” from “Advice” and that’s the problem, the industry wants sales, they like sales. I consider myself to be a good adviser, alas I’m not a very good salesmen and therefore I struggled to hit my sales targets, I would dearly like to see a world where I can go and talk to a client and give them advice and be able to draw a fee from their investments so they don’t have to write a cheque out, but most importantly not have to worry about having to sell them a product just to get paid.

Posted by: Kev S