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Banks systematically sell products and the RDR will not change that, Sesame Bankhall executive chairman Ivan Martin says.
In his closing address at the Sesame Symposium in Manchester this week, Martin said tied advisers will remain driven by sales targets despite attempts to cultivate a "level playing field" for them and independent practitioners.
RDR rules to be introduced in three years' time state restricted advisers will be subject to the same professional standards, such as minimum qualifications, as IFAs.
Restricted advisers will also have to make clear their product limitations to consumers.
But Martin says banks will continue to try to flog in-house products to unsuspecting customers.
"I think we all want to create a market where consumers can access the very best advice, independent advice and not the kind of systematic product selling which will otherwise drive customers towards the banks and create a future advice crunch," he said.
"[The] banks won't change, you know. No matter how much they say so. They won't change because they can not change."
Martin pointed to a recent experience when attempting to pay in a cheque at his local bank as proof of banks' continuing focus on sales.
"The other day I joined the queue for cashiers at my bank only to be kept waiting as every customer - who just wanted to pay a bill, pay in cash or withdraw money - found themselves on the end of a grilling:
"Do you have home or life insurance?"; "Have you got plans for this money you are depositing today?"; "Do you want to see our financial adviser so that he can see if you're getting the best rate on your money?
"This wasn't a cashier delivering customer service excellence, it was a cashier driven by monthly sales targets."
Martin also said banks had backtracked on pledges to adopt the minimum standards as set out in the RDR.
"Despite saying they were happy to adopt [them], they now say they can't afford to do it in time and that a lower standard should apply to them."
The British Bankers' Association (BBA) maintains tied advisers are committed to meeting the RDR's requirements, with most "just getting on" with taking level four examinations under the FSA's "no regrets" pledge.
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Banks using taxpayers money to pinch our clients
Every time I see an expensive advertisemnt for RBS or Llods Banking Group Services I envy it-if IFA's could advertise like banks do we would grow very rapidly. But the banks should not be competing with IFA's using their overwhelming marketing budgets-the moeny the banks are sepnding to compete with us does not belong to teh banks but to teh tax-payer. Whilst the tax-payer owns these banks they should not be advertising at all
Posted by: graham worrall
RDR Won't Change Banks
After working in a bank for 11 years I have experienced the pressure advisers are under to meet the high targets set. This leads to cashires being under pressure to refer customers to the branch financial adviser and the pressure the adviser has to produce sales. The result, a lot of misselling takes place. You only need to look at the proportion of complaints to the ombudsman originating from banks to prove this point. The FSA should be ensuring that good financial, non pressure whole of market advice is going to be available to everyone. This means taking the financial restraints away from the independent sector. Otherwise we will end up with IFA's just dealing with the HNW and the banks, with their poor complaints history dealing with the rest of society. Perhaps this is what the FSA ultimately desire.
Posted by: Ian James
BANKS WROTE RDR TO KILL INDEPENDENCE
RDR is a banking charter. It was written for bankers by bankers. The FSA is staffed by bankers. The RDR attack on commission is designed to kill independence and the so called consumersits are asleep on thie watch as they cheer the end of commission without thought to what the alternatives will bring! Commission is the oxygen of independence freeing the adviser form the shackles of employment, cross subsidising payments form those that buy to those that don't, facilitates independence of advice, motivates action, rewards success and punishes mediocrity. No wonder certain parties want it banned - it represents everything that they are not and can never be. Commission didn't arrive it evolved as the ideal remuneration for products that are sold and not purchased. It you want to kill independent advice then starve it of oxygen! SIMON MANSELL TEMPLE BAR IFA LTD
Posted by: SIMON MANSELL
Get real Mansell
Simon Mansell - you are on another planet! Suggest you find a ship to get back to Earth! Can you just tell us, logically of course, how banning commission would kill independence? No commission forces one to charge a fee. If the customer can't pay it, they will have to look elsewhere. If they can, the adviser has to work hard to justify it. Based on that, how exactly will an adviser who earns a fee be anything but independent? Commission is more CO than O2.
Posted by: Harry
Simon Mansell
just a short one for a change - Simon, well put - I'd vote for you!
Posted by: phil h
RDR Wont Change Banks
Well said Simon and sadly Harry sounds so smug if they will not pay go elsewhere he sounds just like the type that give us a bad name. I along with many other IFA’s care about our clients no it is not only money it is about looking after and caring about those that have been with you for a long time, so come 1/1/2013 because they will not want to pay a fee I should tell them to walk. No Harry I think you are missing the point if a consumer has choice as he has at the moment and that choice is how he/she wishes to pay for the services they receive it is up to them and is totally transparent if they want to pay by fee ok if they wish to pay via commission then again it is their choice. But for the FSA to force clients to pay by fees or CAR whatever will do two things One they will not take advice and it will be those that most need it & Two they will by default end up at the Banks being sold as much as the Banks can sell to them. No it is all about consumer choice but that is being withdraw. We have too many focus groups and individuals that tell us what to do most of whom have never given advice, sold anything, run a business or have a clue how we really work as IFA’s and I mean those IFA’s that care about their clients that is!!
Posted by: Jeff M
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Absolutely No Chance
We would be fools to expect any review to impact on the banks ability to meet its sales targets, after all they owe the taxpayer £b's. If we stop them making profit their profits we will never get it back.
Posted by: Andy Blower