Categories: Industry
Tags:Fsa| Bba| Independent financial advice| John greenway mp| Aifa| Rdr
Tied and multi-tied advisers should consider themselves “very lucky” they may be able to use the term ‘advice’ when explaining their offering to consumers.
That is the verdict of Baroness Sheila Noakes, the Conservative Party Treasury spokesperson, addressing British Bankers' Association (BBA) retail policy director Peter Tyler at a meeting of the All Party Parliamentary Group at the House of Commons yesterday.
Tyler had described the term ‘restricted advice' - that proposed by the FSA to make clear to consumers they are dealing with an adviser with ties to one or more product provider - as "pejorative".
"We feel the term 'restricted' could confuse and deter consumers from taking advice," he said. "To us, it seems to reflect the quality of the advice, rather than the limited range of products that can be advised on, and that's not right."
Noakes hit back: "Hasn't a huge concession been made already by allowing that word 'advice' to be able to creep into what banks do at all?
"The superiority of the independent adviser remit must be clearly indicated. You're very lucky not to have to simply call it sales because, until recently, that is what it was going to be."
Until its most recent RDR paper, the FSA had proposed the term 'sales advice' for tied operators.
Tyler added: "Is it not possible for advice given by banks to be better than that given by IFAs?"
All Party Parliamentary Group chairman John Greenway hinted it may seek to change the term 'restricted advice' on the back on Tyler's concerns.
But speaking afterward, AIFA director Robert Sinclair pointed out FSA research found the term ‘restricted' best reflected what consumers felt tied and multi-tied practitioners should be called. However, he added: "We are with the Baroness; they [bank advisers] will be lucky to be able to keep the word 'advice'."
"In terms of the quality of advice offered by banks versus IFAs, I would say a single consumer might end up with an equal outcome by seeing a bank adviser, but it is highly unlikely all consumers will end up with a better outcome," he said. "That's the difference."
| Comment | Baroness to banks: You're lucky to be able to use word 'advice' |
Related articles
From IFAonline
Categories
Tags
Comments
Restricted advice
We advise you to buy our product. Now how much can you pay sir? Restricted advice is just a KYB ?: Who can obtain redress if it was made clear your advice was restricted ? Whos side are these guys on? not the consumers clearly.
Posted by: Spike
Advice??
As the baroness said, they are extremely luck to be able to use the term at all. They are more than happy to hide behind their limitations when it comes to complaint time. There are occassions when the Bank & its adviser will have the best product. These moments are however, 'occasional' and advice rarely comes into it from my understanding.
Posted by: kevin Robertson
THANK YOU
How very encouraging to hear that Baroness Noakes, who will shortly be in Government, clearly recognizes the distinction between IFAs and banks.
Posted by: Martin O'Kelly
Baroness Noakes for Prime Minister
If we cant get this very astute lady for Prime Minister can we at least get her to be in charge of the FSA or whatever institution they call it next and put the banks in the position they belong as a salesforce to the masses who don't understand their concepts.
Posted by: C Evans
Where do multi-tied advisors fit in?
Whilst i respect the superiority of advice given by IFA's over those of tied bankers.... where do multi-tied advisors fit in? Baroness Tory lumps them in with tied bankers... why? The fact is that IFA's cannot analyse and advise on the whole of the market all the time and if they are honest with themselves they will admit a tendency to fall back on favourite products, favourite providers and favourite fund managers. While attention should be paid to how multi-tied advisors arrive at their selection of the market their is no reason to automatically presume their advice is any less valuable than that of IFA's.
Posted by: Paul**
Polite talk
I think the baroness was being polite.
Posted by: John Whipple
Accolades
Give Baroness Sheila Noakes a Blue Peter Badge. Get down Shep!!
Posted by: Nick Clemens
Existing Products
Perhaps Mr.Tyler would care to explain why banks do not advise their clients on the suitability of existing funds within products already held with the bank? He already knows the answer of course. Its because theres no profit in moving existing money around, only in selling new products and they don't remunerate advisers based on retention and fund management, only on new sales. I know from personal experience thats how the banks work "Pile em High, Sell em Cheap". They regularly use a "product of the month" and you are targeted to sell a set spread of products to clients each month regardless of whether they need it or not. At the end of the day its all about the big holiday in Mauritius on offer for the top salesmen *cough* i mean advisers.
Posted by: K S
Sorrry to go anon
I am an ex bankassurer (6 years) having been an IFA for 1yr before bank and then IFA for the last 11. There is nothing wrong per se with Bank advice and Mr Tyler is an idiot for arguing equality, when he should have been arguing a tied firms good USPs. the main advantage of being a good tied adviser is you know your products in your briefcase inside and out and can give the client the best from your armoury and I could sleep at night doing that provided my employer put the right products in the breifcase even if they were often more expensive and not quite as good as what an IFA could do What Paul said about lack of service on clients with existing products was however entirely true and is one of the most shocking parts of the RDR in that they rip 7% up front out of contracts and then supply NO ongoing service whilst good advisers who have taken less and give ungoing have the threat of removal of the contracturally agreed trail being removed in the RDR. As to sales targets, there ARE some good guys out there in banks too. For two years I worked as a business tied adviser (advise to businesses on pensions, key man etc) and whenever the enxt weheeze was marketed, our sales of the product in the business team went DOWN, not up as we were always taking the long term view of what was best for our clients and NOT the short term which many of the personal lines advisers were so focused on. Unfortunately it resulted in the end with our line manager (the best line manager I've ever had) getting swapped with the dic**head who managed the personal team. Not surpisingley within 2 months half the team had gone (in my case back to being an IFA) Unfortunately what is coming out of the FSA now is very much like what the di***** said and did, but my only choice now appears to leave the industry if I disagree with what looks likely to be foisted upon us through RDR. Oh and by the way, we have been doing CAR for about 6 years, are just moving over to regular retainer fees, have a clear fee tariff and are pretty much RDR ready, but being dictated to now by the FSA is worse than being employed.
Posted by: Anon not a mouse
Related articles
Most Read
Audio / Visual
With the industry's biggest fund managers, IFAonline welcomes you to the media centre.
Ensure you never miss another story by following IFAonline regularly updated news feed on Twitter.
Events
Poll
|
|
Related Information
Job search
Adviser Careers will open the right investment career path for you. Search hundreds of vacancies on www.advisercareers.com now
In Focus
Newcastle IS , a dedicated service for Independent Financial Advisers and intermediary networks, has launched a new market leading range of Fixed Rate Bonds offering rates of up to 3.25% Gross/AER plus generous upfront commission rates for IFAs.
Viewpoints
With the debate surrounding funding long term care in the run up to the last general election, few areas have been as topical or well publicized.
sponsored by
Naivety?
"Tyler added: "Is it not possible for advice given by banks to be better than that given by IFAs?"" From recent experience with a number of clients, in a word, NO. I am sure there are good, capable people working in bancassurance sales forces, but they sell & "advise" on products, NOT the overall client position.
Posted by: David McCabe