FSCP demands IFA fee monitoring; Wants QCF Level 5 minimum

Senior Partner

It is all very well the FSCP stating their concerns regarding fees that Financial Advisers may charge post RDR but they are conveniently forgetting the overheads that Financial Advisers face and, in the main, have been introduced through the years by the regulators. Such things as regulatory fees, financial services compensation schme levies and professional indemnity premiums. As an exampls the FSA fee to our firm increased by 70% this year. What do the FSCP expect for me to register, and work, as a charitable institution?

Posted by: Mr K. S. Barrett

Are you kidding?

If this is true - My God - exasperation doesn’t cover it! They have also been calling for education at level 5 - now they want a control on fees! This panel is made up of a load (but not all) of superannuated journalists. Are their fees per article constrained? What are their expenses? The rest of the panel is made up of professional do gooders who it seems have never had responsibility of running a business. Are we in a free market economy or not? Their ideas are more appropriate to pre Glasnost Russia than a western economy. It seems to me having once been to one of their meetings that their aim is to have professors of financial services, who work for free and provide 100% compensation whenever a client sneezes. For my part I can assure the panel that my prices are going up. I have already attained level 4 and for all I know level 5 too. However with all the regulatory imposts, the rising fees from the Compensation schemes, PII, higher rates, fuel bills, taxes etc etc and they want by fees monitored! The politest way I can put this to the panel is “Go forth and multiply”.

Posted by: Harry Katz

Total Control

They want a free market one day i.e. where we negotiate a fee with the client and the next day they want to control what we charge. Make your mind up. How about controlling how many cups of coffee I'm allowed in a day as well!!!!

Posted by: Bob Donaldson

Mr

The FSCP must live in a different world to IFAs. Having been an IFA for 35 years I am yet to meet a client who could be done down on fees, commission, yes, we have seen it times without number, usually from Direct Salesmen. It wasn't called Allied Crowbar for nothing! There are only a few IFAs who have been ripping off clients with commission but fees are definable and it is very difficult to overcharge a client who has limited means to pay. We get many phone calls who ask - "How much do you charge?" I can't get away with excessive fees, but every week I see silly commissions earned by bank salesmen/women in the most simplistic manner for selling structured products to people with whom they should be more circumspect and about whom they know virtually nothing. The sales line being "Are you going to want this money in the next six years? Then why don't you put it in this plan which guarantees your capital back at the end of the six years, plus what it makes? Sale made! What seems to be forgotten is that an IFA has to be able to sell the idea of saving, he is, after all, making a sale of an intangible product, be it an ISA or a pension or any other plan, for a sum of money to paid at some time in the future. What other profession has to sell its services? How do you examine for salesmanship? As Henry Ford said - "Until someone sells something - nothing happens!" If they continue with their demands, how much further will the numbers of IFAs shrink? We have lost 90% since the Financial Services Act was passed 22 years ago, how much fewer can we become?

Posted by: John Mayhead

Why not just reintroduce slavery?

So, let me get this right, the FSA will charge me whatever it likes and I either pay or go away and do another job. The government likewise will charge whatever it likes in tax and everyone who supplies our business will do likewise, the only constraint being the market. We however will be told what we are allowed to earn. When will the busybodies on the FSCP realise that the two ends of the equation just don't meet? You can't expect a business to pay more and more and earn less and less. This is ironic though. Having nagged and whined for fee based advice they are now worrying that the fees will be too much. Well, if they don't like it I guess they could always use 'Confuse the Meerkat' or somesuch site to get the 'advice' they deserve.

Posted by: Neil F Liversidge

GET REAL fscp

They are getting us mixed up with the citizens advice. The FSCS have openly stated that they monitor ( regulate ) the FSA, this may be why they feel they can dictate adviser terms. Well they can think again. every adviser in the land will of necessity increase their charges after the RDR. Adviser overheads have rocketed over the last few years. With regards to level 5 qualifications do they seriously think they can demand higher levels if profesionalism & at the same time demand lower charges? Their reasoning for level 5 seems to be that every other professional is at degree level. That may be the case but have you ever met a lawyer with low charges? I think not.Come to think of it have you ever met any other person in the land professional qualified or whatever, who is discriminated against in terms of the 15 year longstop? The FSCP should go and do a weeks work in an IFA practice on a voluntary basis ( not sure who would have them mind you )instead of sitting around drinking coffee & spouting absolute drivel.

Posted by: LOL

FSCP

First the FSA gets hung up commission now the FSCP (whoever they are) is getting hung up on fees. Once again the Labour Government provide us with a script that you just could not make up. The FSCP, like the FSA appear to be yet another Government body put in place to protect the consumer. However the result will be that those individuals who need financial advice will not be able to afford financial advice as the advisers will be forced out of the industry or will move to more profitable, wealthy Clients. Does the Dentistry industry spring to mind! Now looking after more wealthy Clients appears to annoy the FSCP. Why is this the case? If a Client is prepared to pay for a service they will pay what they believe acceptable to them. Why should the FSCP get involved? It is none of their business. Fees do not protect the consumer from being 'ripped-off'. Just look at how many dodgy Solicitors, Accountants, Builders, Plumbers, the list is endless, who charge fees and rip-off the consumer. The main reason behind this move to fees by the FSA has been pushed by that control freak and great statesman of our time Gordon Brown. His coffers have been empty for years and one industry that he could get tax from was ours.If consumers pay fees this will generate VAT, commission does not. As for the FSCP, how many more regulatory departments are we going to see created over the next few years who's only visible product is bleeding the industry of fees and fines. These Government bodies sit there in judgement of an industry of which they have no idea of it it operates. They act as Judge and Juror yet are accountable to no-one. Had an IFA firm acted as irresponsibly to its Clients as the FSA has to its Clients (i.e. the regulation of the banks to protect the consumer) the IFA firm would have been fined and the business shut down. How does the FSA punish its members of staff? Oh yes it pays them £27 million in bonuses. So what I say to the FSCP is sort your own back yard out before you come marching into ours.

Posted by: Richard Hardy

Mr

GOOD NEWS Once these bureaucrats manage to destroy the private sectors ability to generate income and as a consequence tax revenue there will be no money to pay them and they will all be on the doll. I thought that in a time of recession the priority should be to stimulate growth not stifle it.

Posted by: David

Mr

FSCP. What a load of rubbish!! In a succesful free market economy one is usually left to determine the value of his goods and services. If the fee is excessive given the prevailing market conditions then consumers will shop around and buy elsewhere. The FSCP really are a bunch of imbiciles. Consumers today shop around more than ever, especially with the aid of internet technology. Who regulates the fees charged by Barristers, Accountants, Solicitors, Plastic Surgeons, Accountants, Dentists, Footballers and Car mechanics etc. Do any of these people have quango's watching their fee levels? People charge what they are worth and consumers will judge the value of the advice accordingly. Would I pay £5 for a loaf of bread? Obviously not. Why not? Because Im capable of finding the same or similar for far less. This bunch of Morons have no idea what it takes to run a business, they understandnothing of basic economics. If they want Level 5 entry qualifications as standard then they will have to accept that those indidviduals who enter financial services will rightly be expecting to earn on a par with other equally qualified professionals. If the opportunity for parity is denied then where will the next generation of advisers come from? Not only will this have grave consequences for the greater economy but the end loser will be the consumer. FSCP try growing up and getting a proper job, one where your results can be measured by some meaningful scale. Try doing something where you actually make a positive difference to the lives of the people you interact with. None of my clients ever complained that I helped them plan to be too successful or that I helped them become too financially independent or I should'nt have gone through so much trouble when sourcing them the most cost-effective mortgage deal. I know that this woud be the sentiments of the vast majority. But Mr/Mrs FSCP, what will people say of you? What did you acheive, how did you make a positive difference to peoples lives? We already know how deafening the silence will be.

Posted by: S Chohan