Anti-RDR group gets backing from MPs

Positive News

Great news that the anti-RDR group are picking up more support. For those of us that believe RDR will not create a better enviroment for the consumer or the adviser there is no option but to stand up and give your support. You certainly have mine.

Posted by: Nick James

rdr

I charge fees or take commission depending on the clients choice(which they should have) and the knowledge I have does not make me "underqualified" I am sick to the back teeth of people think they are holier than thou spouting "commission hungry underqualified salespeople" all the while. Most IFA,s started in the business as direct sales people for insurance companies or bankassurance on commission/bonuses. Very few people joined the industry working for IFAS on a salary or fee basis.

Posted by: TERRY ARCH

CHOICE

Its is extraordinary how people bang on about the benefits of choice as being a great thing but when it comes to purchasing financial products the public are not deemed worthy to have choice. I am equally sick about people slurring commission based IFAs believing they are only interested in commission. As an IFA I can rip someone off just as easily charging fees as I can charging commission (and the latter does not have clawback). It is not the basis of remuneration that is important it is the integrity of the adviser. Integrity cannot be measured by qualifications. Perhaps that is the problem. Integrity is not a commodity that third party people can make money out of - except perhaps the clients of those advisers with integriity; whether they are fee or commission based or both Am I the only IFA funded by a mix of remuneration who believes that many who revert to the tired cliche of 'commission hungry IFAS' may just be protesting just that bit too much? Do they have something to hide?

Posted by: Geoff Pollock

RDR

They have my support. I agree with Terry. There is always some holier than thou self interested specialist who bangs their drum to the RDR beat in the hope of putting half of their IFA competition out of business. If they were so good at their jobs surely they would have already done that? I have no problems in differentiating between higher qualified IFA's, but I'd like to see the public have as much choice as possible, in how they choose to do business.

Posted by: M Green

way to go alan

It is people like Alan Lakey who stop the FSA walking all over us.Is Clive suggesting that any adviser who objects to the rdr is a commission hungry salesman? People like him make me sick. Holier than thou, sanctimonious and placing themselves on a pedestal. What on earth are his type going to do when a huge levy like the keydata one we have just been landed with, lands on his desk post 2012 with only a few advisers left to pay it? He must be charging more in fees than any commission hungary salesman ever earned.

Posted by: fedupofclivetypes

RDR get real smell the coffee

RDR is not going away, yes the politicians will give you support, but ask yourself will they have received advice from any adviser who has taken the level of commission which is allowed? They will fade into the backdrop as soon as they have their seat. The government of the day will have more pressing things on their agenda than a few thousand IFA’s who do not want to fit into the rest of Europe, regarding the way they receive remuneration. It is possible to take your agreed fee from the product it will not be pre funded. It is not as though this has just been introduced and it will happen tomorrow, we have the best part of 5 years to get in line, but some of us have stuck our head in the sand hoping that it will go away and yes if you keep your head in the sand as sure as egg’s are eggs you will get “rogered”. If we get ready and it does not happen, we will have a stronger business, better qualifications and guess what, the public may also have a little more respect for us. You can see that the providers are expecting it to happen; they have designed products which fit into the RDR compliance at a great cost. They have also closed for new business a great number of old products, where can you get the levels of commission we used to get from selling a £100.00 per month pension or a £25,000.00 Bond. Get real smell the coffee and just get on with it because if you do you will not lose out.

Posted by: Des Rushworth

Mr Barwell's slur on Alan Lakey

Mr Barwell's remarks demonstrate a surprising naivete about the complexity of our job. The most optimistic assessments I have seen indicate that 30% of IFAs will leave the industry in 2012 as a result of the lack of grandfathering. The slack will not be taken up by the "qualified" IFAs - contrary to some opinions. The time required to do the job properly and meet regulatory requirements is now such that there just is not the time to deal with that level of increase in client numbers. Most of the IFA's I know (like me!) would be simply unable to cope with an increase in enquiries of this magnitude and still have time to lead a normal private life. Recent history since the early 1990's would indicate that there has been a strong correlation between the strength of the IFA sector and the competitiveness of the mainstream, long term savings and pension providers. The most cursory research proves beyond reasonable doubt that those institutions which offer their products via IFAs have better performing, lower charged products than those which only distribute through their own salesforce. Why this is, is hard to prove but it seems reasonable to suppose that IFAs bring competitive pressure to bear on providers by virtue of their having a choice. The obvious result of the future cull of IFAs is that all IFA distributing product providers (including wraps) face a fall in business of 30%. Now it is clearly simplistic to simply assume that the blow will fall mathematically across the board, but however it falls, the fact is that for most providers this will render them unviable. Worse than that is the likelihood that some might be forced to close immediately with the usual associated problems for their customers. Quite where the FSA will find the time and resources to police these, then struggling, institutions is difficult to see, given the time that will have to spent making sure that everyone is acceding to the new post RDR rules. There will be more scandals, more negative headlines and a further loss of confidence as these firms fold. A great number of smaller but decently run institutions will therefore be forced to merge or more likely and ultimately, seek takeovers from larger institutions. The institutions who will benefit most from this will be those with an unfair competitve advantage - the major banks -whose advantage is unfair because they have been bailed out by taxpayer's money. In other words, many of the individual IFAs and many of the smaller providers who will be forced out of business in 2013 will find that a substantial part of the personal and corporate taxes they have been paying from 2007 until 2012 (which has been handed over to the major banks without their consent) will now be used to purchase their businesses at knock down prices for the express purpose of acquiring a bigger asset base and for the undisclosed purpose of eliminating competition. I do not expect the FSA nor the Treasury to be particularly moved by the prospect of this injustice, however I do believe that it is the duty of the FSA to consider the great consumer detriment which this state of affairs will bring about. I believe that it is highly likely that there will only be up to 10 retail financial conglomerates by 2020 as a result of this. My understanding is that one of the primary purposes of the FSA is to promote a healthy competitive market to which the entire population has access. Since my argument demonstrates that the number of institutions will decline sharply as a direct consequence of RDR this means that RDR will cause a massive reduction of choice of product in the UK (which used to lead the world in this). I would suggest that this cannot be in the public interest and wll result in a poorer nation because of an even larger savings and insurance gap. Moreover, given the banks' previous record of market abuse and the startling coincidence that their savings, life assurance and pension products seem to all bear similar levels of (much higher than average) charge, I would also suggest that the other unintended result will be a significant increase in costs for the average customer, with the strong likelihood that the poor and unsophisticated will bear the brunt of this, until they become embittered and cynical. This will also add to the downward pressure on IFA remuneration, leading many to leave the field resulting in a larger open goal for the larger conglomerates. Faced with such probable consequences, I would suggest that making ill considered and largely unjustified remarks about the motivations of those of us who would seek to prevent the destruction of our livelihoods and the placing of the entire UK savings business into an oligopoly run as a consipiracy against the public, reminds me irrestibly of Nero fiddling while Rome burns! Oh, by the way, I have been doing CAR with fees and commissions since 2001.

Posted by: davidw

Look him up on the FSA web site

It would appear that Terry is right and that the perfect Mr Barwell came from Lloyds Private Banking where he would have found tmie to tak eany qualifications he wanted to at their expense. Nice wind up Clive!! http://www.towergatefinancial.co.uk/north/team.php

Posted by: Eric Shun

Argue don't insult

The thing that concerns me about these blogs is that rather than arguing for or against the RDR changes it quickly turns into a series of insulting comments attacking the integrity of the participants. I happen to believe that the key planks of the RDR are in the interests of the consumer. In a highly technically complex financial world I believe strongly that a combination of relevant experience and tested knowledge through higher standards of qualification is essential. I also believe that "adviser charging" agreed between the adviser and client without interference from the product provider is a much better system than commission. Once and for all adviser charging is not about charging fees! BUT that does not give me the right to insult the person who disagrees with me. I don't know Alan well but I accept that he believes passionately that the RDR is wrong. He has every right to challenge this change and our profession (or industry if you prefer) is better for healthy debate. Being for or against the RDR is not a matter of taking the high moral ground or not it is simply a question of which environment each of us believes will work best for our clients and our firms. I hope that Alan's lobbying fails. But let me repeat that doesn't make him or me the better person it's simply that we hold different views

Posted by: Nick Bamford

RDR

I think Nick Bamfords last line says it all. We all have our different views but certain sections of our community obviously do not think we should. Not only that neither does the FSA. Its either their view or anyones elses does not count. Despite all the consultations? things will be done their way or not at all.

Posted by: terry arch

ANTI -RDR

Hurrah for Alan Lakey and all non-pretentious comments by professional IFAs. Sad Clive Barwell and Des Rushworth don't really get it do they? At LAW the IFA is the consumer and BROKERS business for VAT-EXEMPT BROKERAGE not not not commissioned by the product providers to sell their goods. The ignorant will be defeated if there is a government of intelligence elected and that means Brown's lot HAVE TO GO or as has been said, our profession and subsequently the industry will be wrecked sooner or later. The consumer won't be able to afford it and probably won't want it.

Posted by: MICHAEL FORBES BATES

Market value

As IFAs you will no doubt subscribe to the market finding its own level. Pray tell why commission based IFA firms have such low MVs when sold. (If they can be sold at all) As a consumer looking in I cannot understand how any well informed client would opt for a commission based investment product, as commission is currently paid.As a consumer I can see its about more than commission. Perhaps IFAs have become good at disclosure? Perhaps clients don't understand the long term impact of charges...or the cost of advice. .....and why would take advice from anyone less than fully qualified? The cold facts are that very shortly the IFAs high reward for relatively low input that many( not all) sales yield will go. I have no doubt that despite the detailed and dedicated work that some IFAs put into client advice some clients will still query the "fee" or agreed charge. Those who can justify, will. Those who can't will not be IFAs. No intended insult to Lakey or those who use commission thoughtfully.....but you are holding on to an antiquated and discredited tool that has had its day. The danger is that they artificially defer the inevitable. Let the market find its level. Printing press,Mills,Mines,Automotive,Food, Publishing,Airlines,Mailservices,Technology..... IFAs Cn

Posted by: c.nicol

It's all skewed

For those of you who've not seen it, read http://www.berr.gov.uk/files/file45019.pdf. This indicates that at least some small sector of government realises that the industry needs diversity and that the opinions of a small but vociferous segment of the population should not be permitted to drive the regulatory agenda without regard for fairness, proportionality and, above all else, consideration for the collateral damage likely to be caused by the destruction of large swathes of the IFA sector just because they're not qualified in all sorts of areas on which they don't advise and because, without ripping clients off, they offer a choice of remuneration between fees or commission. This business model is not broken and doesn't need complete restructuring, even if, like any other industry, it'll always contasin scope for evolutionary improvements. How many high profile frauds have been perpetrated by highly qualified solicitors? The trouble with the FSA is that it seeks, with whips and clubs, to drive the IFA sector towards some impossibly perfect theoretical utopia that can never in reality exist, whilst at the same time sweeping under the carpet its own manifest failings as "things from which we've learned lessons" (but which haven't cost us a penny in terms of any fines or sanctions or the intervention of any third party to force us to do better in the future). The biggest problem with the industry isn't commission or a weak qualifications base, its bias and corruption in the way in which it's regulated.

Posted by: Julian Stevens