9th December 2010

Work of the FSA & treasury feedback 2007-08

and the request by the TSC in November 2010 for the views from interested parties on whether the RDR will achieve the stated outcomes and whether the outcomes could be achieved in other, potentially better, ways.

In a TSC hearing on Tuesday 23 November, Hector Sants, Chief Executive of the Financial Services Authority told the Treasury Committee that the Retail Distribution Review had three specific outcomes:

• A transparent and fairer charging system
• A better qualification framework for advisers
• Greater clarity around the type of advice being offered

The Treasury Committee has decided to call for written evidence on these specific points: whether the RDR will achieve the stated outcomes and whether the outcomes could be achieved in other, potentially better, ways.

The Treasury Committee will decide whether and how to take this matter further in the light of the written evidence received.

It is important that the TSC sees input from across the IFA spectrum.

Make your submission

In 2008 many submissions were made by IFAs to the Treasury and they make very interesting reading. I urge you to follow this link and explore what the Government of the day seemed keen to be seen consulting upon but very reluctant to actually do anything with the resulting input- much of it highly detailed, heartfelt and well reasoned.

This process in 2010 I think is very different with a powerful government committee intent upon seeing that deeds and actions are matched.

Here are some extracts from the end of 2008 that have a strangely familiar tone about them.

Memorandum from Mr Bob Perry

I am an Independent Financial Adviser with over 30 years of experience in the financial services industry. I am a Certified Financial Planner and expect to be a Chartered Financial Planner within the next few weeks.

My firm is a very small one with two registered individuals and one administrator/secretary. We provide a highly dedicated service to our small number of clients. Our client base has been established over a number of years and is built on excellent client care. We only advise in those areas in which we are:

1. Qualified.
2. Experienced.

We do not mind how we get paid. We are happy to receive payment by fees or commission. There is no problem with commission. The problem is with the commission driven saleforces whose income is dependent upon initial commission. In many cases such salesforces do not clearly explain to their customers (they are not clients because there is little or no after sales service) that the commission is built into the contract charges and is therefore paid for by the client.

The vast majority of small, owner run IFA businesses thrive on Treating Customers Fairly (way before the FSA thought of this) and have built their firms on client referrals. This would not be possible without ensuring clients are fully aware of how the IFA is to be remunerated and how commission is funded. Nor would it be possible without excellent customer care. Unlike a commission driven salesman, small independent IFA's take a longer-term view and put clients first.

Read more

FSA/FCA, RDR, Panacea Comment