Doesn`t need a crystal ball.

Here we go again, FSA having allowed offending firm to trade inappropriately for a considerable time now shuts the stable door and applies redress fines all of which will not be paid as the firm goes into administration dropping the liability into the FSCS`s lap who then pass the parcel to us small independent advisers. The End of the World is Nigh!! Is it only me who can see this coming.

Posted by: Hugh Jeego

What hope is there for advice

as I would remind you that Peter Sprung was Chairman of either the LIA/PFS/SOFA at one point, I can't remember which and I also believe you will find he had the equivalent of Level 6! We might just as well give the FSA the PIN numbers for our bank accounts and just say take the money when you find something we haven't done to your satisfaction whetehr clients have suffered a loss or not is immaterial and fine us so you can pay your staff bonuses, even if that means we have to cancel our own staff's bonuses. This is beyond a joke.....

Posted by: Phil Castle

Viable Model

Yet another large retail financial advisory firm gets into financial problems and an Insurance Company picks up the tab. in 40 years in the industry I can think of very few larger advisory companies that have survived - but a lot more that have gone under. And a number of those who have survived have had to rely on financial manipulation of one form or another. The history of financial advice points to the fact that essentially it runs better as a cottage industry - a technologically sophisticated cottage industry. A central factor in providing financial advice is the relationship with the client - probably even more than the quality of the advice. If the relationship exists advice can be adjusted to suit changing circumstances. In a larger organisation, with sizeable fixed administration overheads, the emphasis is more likely to be on short-turn turnover and profit. There is therefore a greater level of pressure on staff to "sell", especially in a) downturns and b) major upturns (jump on the bandwagon whilst its there). And where the "sell" pressure rather than the "service" pressure is highest, there is likely to be a higher incidence of mis-selling. The logic of spreading cost over a wider population does not appear to function well in the larger organisation - possibly because there is more opportunity to carry under performing staff (I'm guessing). Whatever the reasons, larger firms, with a very few notable exceptions, do not appear to be able to survive. Which tends to make a total nonsense of the FSA attitude to the industry. Whilst they deny trying to consolidate the industry into larger firms, all the regulatory and administrative pressure is in that direction. The FSA business model is badly flawed; every one tells then that, but they appear to be bent on eliminating bad advice by eradicating advice.

Posted by: Glen McKeown

I wish I'd just written what Glen has!

It's a very good description of why I think the FSA have got the whole RDR wrong....and that they need to take a step back and rethink what the original (stated) objective was suppossed to be unless there always has been a hidden agenda, which if there is one I actually think is probably more subconscious than planned.

Posted by: Phil Castle

they both stink

i rang both FSA and Park Row about the shortcomings and risks of a few of their ARs. neither really wanted to know. both deserve all they get - the 2 worst faces of our biz.

Posted by: david levin