Why independent v restricted makes no sense

A strange new religion

This represents a perfectly sensible analysis of a real problem in financial services. The FSA have created a level of dysfunction by their interminable navel gazing, caused by a lack of genuine interaction with the broad level of practitioners in the financial market. Lucian Camp is, I believe, quite correct in assessing that consumers are not particularly interested in the FSA defined status of the adviser. I suspect that advisers are interested for self glorification rather than professionalism, which is still a rare commodity. I would also raise the question as to whether the vast majority of consumers want an adviser or the seller of a product. When I started most practitioners called themselves brokers because that was the main function, find the best product for the client; advice was a part but a secondary part. The word Adviser was first coined for the Financial Services Act 1986, by outsiders. Since then ego has taken over the process as Advisers increasingly try to add elite value to the term, but rarely the process. The FSA have pushed this further by further narrowing the business vision but adding cost. It is now virtually impossible for the man in the street to buy products directly, so it is little wonder that saving should be at a low ebb. Whilst there are a number of advisers who are hooked on the self glorifying concept of "holistic advice" a large number of clients that I have worked with really only want suitable products at suitable times. But we have created an industry were the sale of the product is indistinguishable from the provision of (unwanted?) service, causing ever increasing costs. I wonder if a better solution to the alleged problems (the stats indicate the problems are smaller than the Regulators would have us believe) would be a separation between advice and product sale. The client is then in a position to determine their own requirements; advice could not be linked with misselling (accepting that there will inevitably be some back handers); product costs would fall, and there may be a freer, more competitive market. The fact is that legislation changed sellers into advisers, and then blurred all the boundaries. Advisers then dreamed of being a profession, but still wanted to sell products, another blurring of boundaries. As soon a s one sells products one becomes commercial - but one can do this professionally. It's a point that appears to mystify many practitioners, who are more interested in mystifying their own position. What is actually required is that people in the financial industry operated professionally, at their chosen level, which is how lawyers and accountants operate (in general). Then concepts like independent, tied, whole of market, uncle tom cobley, could be consigned to the dustbin. And I doubt the consumer would notice. The FSA and the FOS would probably still be required, but at a vastly reduced level on the retail side, and they would be less orientated to the navel gazing pseudo religion financial services is becoming. I know this is highly unlikely to happen because there are now too many different "churches" with entrenched positions, not the least of which is the FSA. After all its the process that counts, not the client.

Posted by: Glen McKeown