Baldwin to FSA: Budget should exempt small IFAs from RDR

don't be daft, Baldwin

Why should small IFA's be treated any differently. Do you think that small GP practices should be allowed to practice with lesser qualified doctors. Perhaps your dentist only needs 3 O levels Maybe your surgeon has done one day CPD practice on a rubber dummy to prove he is capable - with no formal exam. Get real please - we work in a complex environment and the skill sets needed in this day and age require properly qualified and tested practitioners - whatever the size of the practice.

Posted by: Simon

Short of news?

Cannot understand this one. RDR is already in place and the burden has already been felt. Secondly what number of employees is appropriate? Why not 11 or 9? I have a good idea. Put all staff on self employed contracts (reduces CAD also), split up the firm into regulated and unregulated arms and get preferential treatment over other IFAs in the same market place. This is what happens when politicians open their mouths near election time.

Posted by: Sam Caunt

Delay for All

With the FSA/Treasury/HMRC undecided about how fees will be charged to VAT (a potentially massive 20% detriment to clients), no sensible announcement about the simplified advice option, vague requirements for restricted advice and the inevitable comments about a possible delay to the exam requirements I think it is time that the FSA delayed the RDR for everyone to at least 2014 and probably later. What could be a good, reworking of the financial advice market becoming a half baked, ill-thought through farce.

Posted by: Tom

It's all about the money!

£600,000,000.00 is a lot of extra revenue for The Treasury. Why would one of their own be against it? Figures based on 30,000 IFAs currently earning on average £100,000 commission each. Convert the commission to fees and add 20%

Posted by: Rob Simpson

Baldwin to FSA re RDR

Baldwin's heart is in the right place - but her brain is nowhere to be found. Contrast her with Hoban, who is an arrogant twat, and RDR will go ahead (with VAT being lumped on as an afterthought) despite all protestation. Joe Public will be the main casualty, albeit many IFAs will hang up their fact-finds, but the regulatory bandwagon will roll on. 10 years from now financial services will be comprised of banks (albeit they won't be providing any service), compliance officers, regulators and a few National IFAs (for rich people only. 10 years after that, most FSA/FOS personnel will be retired on fat pensions having destroyed the UK savings culture, pensions for the great unwashed, self-sufficiency (through protection products)and competition in the mortgage market. All pretty sad really but only to be expected when the civil servant mentality is allowed to reign unchecked.

Posted by: Bill Wells

Continue on course

The RDR should certainly continue to go ahead and the requirements should be applied uniformly to all businesses regardless of size. Any other approach would be ludicrous. In addition, protection from increased regulation in the future would only be put in place to encourage growth within these IFA practices in the hope that it will lead to job creation and higher tax revenues down the line. The only businesses that are likely to expand are the forward thinking practices that are either RDR compliant already or a long way towards this target. Scrapping or deferring the RDR does not make sense from a qualifications point of view either. Consumers need suitably qualified advisers and the RDR deemed Diploma status the right level when it was initially announced. Nothing has happened to change this. I do think it is a shame that some advisers with a wealth of knowledge may leave the industry, but they are not being forced out. The frame work for the RDR has been around long enough for everyone to obtain the required qualifications.

Posted by: Richard Fyfe

Not so Daft

@Simon - You say to Harriet Baldwin "Why should small IFA's be treated any differently". Perhaps you should ask the Government why ANY small business should be treated differently. I ask - Why shouldn't IFAs be treated the same as any other small business struggling with over-burdensome and unnecessary regulation. Your arguments as to the medical profession wear thin. I would prefer a dentist with 3 'O' levels and a rubber dummy who has 30 yrs of successful extractions behind him to a wet behind the ears exam junky with zero practical experience. I would prefer a doctor with 30 years of successful patient care and treatment to one with no experience and a degree! Yes, the IFA profession needs a measure of standards and competence, but pushing experienced people off the cliff without a rope is no way to improve the quality of advice in the short or medium term. The Government is keen (and rightly so) to allow small firms of Car Mechanics to be exempt from new regulations - it could be argued that people will die as a result. WHy should they be treated differently just because they are a small firm? Don't be daft Simon. Get real. Fair treatment is not necessarily equal treatment.

Posted by: Grosvenor

Outcomes

Well said Grosvener A satisfied client is not necessarily a client who has been treated fairly, is one of the fsa's mantras. By the same token, a small firm with less than 5 or ten employees treated the same as an organisation with dozens of employees may be receiving equal treatment which is not necessarily fair. Too deep for the mega budget fsa though.

Posted by: lol

Baldwin to FSA

i agree with H. Baldwin in her approach ,too much regulation is killing off this businesss. How many jobs have been lost this year to date 8,000 approx? let alone the drift away caused by RDR. will sitting a 3hour exam at the age of 62 yrs give added value to my clients over the next 5 yeears or so , highly unlikely? believe me i all for better training keeping up to date with tax changes /legisation etc but this could be done with certified training days to maitain ones qualifaction.Firms employing more than 10 staff need far bigger control/compliance and practice than a sole tarder with 2/3 staff!Qualifactions and exams do not impart integrity or trust into this business!Only last week,recently a chartered planner,as reported in the press advised some rather dubious property funds for a divorced client losing some 1million in the process,so how does that fit into that exams are everything??

Posted by: keith lewis

More red tape

Bamford and the pro RDR lobby are just plain stupid. When the gvt wants and the counyrt needs less red tape we are expected to have the biggest pile thrown at us again with a £1.7 billion cost. Apart from the fact it's illegal anyway. Exam junkies should just p*ss off and work for the gvt as gvt workers seem to have more spare time than anyone who really works properly. As someone said. public sector work ethic has created a dependency attitude. Hence they won't give up their gold plated pensions when the private sector's been raided already. I am fed up paying for my own pension and someone else's as well. I can't believe anyone is so stupid to think RDR is good in it's guise having been born out of a failed regulator who is looking to save it's own ar*e now. I am so sick and tired of this all I may just hang my pen up as well when the time comes. As someone had already said the only clients who will pay are the rich ones. Are you pro RDR won't get a look in as there's not enough to go around.

Posted by: Incompetetn Regulators Award Team

Think about the clients!

With potentially millions of clients being deprived of genuinely independent financial advice - the cause(s) need rigorous scrutiny. Meaningless exams supported by vested interests (you know who you are)and forced fee charging will not only decimate the market, but cost billions of pounds that we cannot afford. The only silver lining is that after 2012 the survivors will realise their error when they have to pay a larger share of the investors compensation scheme bills. Ms Baldwin has a pragmatic approach which all sane people should welcome.

Posted by: Fimbra

Practical Solutions

I agree pretty much with Grosvenor's comments. Personnaly I think it would be impractical to exempt small firms and treat them differently with regard RDR, but I DO think that recognising it is impractical does not mean that their needs and those of their CLIENTS like other businesses should not be considered. I actually think the big firms and banks have actually got as big problems with RDR as small firms, it's just that we all know/believe that the rules will be changed and justified for their benefit after a swathe of small firms have left using the justification of "to avoid consumer detriment". What RDR says it is trying to achieve and most of the conclusions probably don't need changing.... The ONLY thing which needs changing is the timeline. Doing that is practical (unlike exempting small firms) and gives small and large a better chance to adjust for the future foir the benefit of their clients. I don't think the deadline needs to slip much, probably 31st Dec 2014 would work (although co-ordination with new EU rules would make sense)as I think anyone who has not transitioned charges or qualified could not argue with just under 3 years to TEST & adjust. The problem is the FSA think it is all about adjusting, when adjusting, testing and readjusting is what is appropriate for big changes like this. If you've ever seen a live firing excercise with the Military, they don't fire one shell and then fire for effect, they usually fire one adjust and then bracket the two and fire for effect. It's common sense really the problem is the F-pack think we're all expert conmen rather than experts at common sense! That is what the budget promised and if RDR goes ahead without the promise made in the budget, then we need to make sure that those in power are held to account.

Posted by: Phil Castle