FCA suggests clear out of sales dinosaurs

Panacea comment for Financial Advisers and Paraplanners

29 Oct 2018

FCA suggests clear out of sales dinosaurs

FCA suggests clear out of sales dinosaurs

Arthur’s thought for the day: “You make contact with your customer. Understand their needs. And then flog them something they could well do without.”

I think this may be what one senior figure at the FCA’s perception of financial services sales ‘persons’ is?

David Blunt, head of conduct specialists at the Financial Conduct Authority, speaking at a recent City & Financial conference explained:“Where we want to get to is for firms to have a real sense of personal responsibility for all they do in financial services.

He then went on to say, “Are sales people who have risen to the top the right people to be leading today”? 

As a retired IFA and the founder of IFA community Panacea Adviser, I find his thought process deeply offensive. Is he suggesting that sales people are a sub class. Sounds a bit like the ‘Brexit remainer’ argument about leavers- that they were too stupid, too ignorant, racists, xenophobes……you get the drift.

His Linkedin profile shows him starting his career working for City solicitors Hogan Lovells going on the well-trodden path of articles through to a fully qualified solicitor.

I suspect that David Blunt has little knowledge beyond the walls of regulation and academia. After leaving Hogan Lovells in October 1998, his entire career has been spent in regulation of some sort. Firstly, with a couple of years at the Stock Exchange then from 2000 it has been climbing ever upwards at the FSA and then the FCA.

It was said that intelligence does not fit easily with common sense. The curse of the regulator.

We all agree that happy customers (positive outcomes is the phrase to use in 2018) are the key to any successful business.

But with a working life spent entirely in the world of regulation, I am deeply offended as is the fashion today, on the part of others too, that he should ask the question “ Are sales people who have risen to the top the right people to be leading today”? 

If his Linkedin profile is a yardstick, this is an individual who has no experience of what it takes to raise the money to start a business, especially a regulated business, grow a business, deal with all the troubles that can go with it or has any idea whatsoever about running a business. And amongst the hardest these days is a financial services business.

Sales are bad, sales-people are bad, regulators are good is the message spouting forth? Really?

Any business is built on the fact that it has something that somebody is prepared to pay for. Tangible, or in the world of financial services, intangible.

Any business requires somebody to sell the services, goods, or in the financial services world someone to ‘sell’ the ‘advice proposition’.

Nobody ever bought a financial services product. Historically they were ‘sold’ it, often by direct sales.

That is bad in 2018, it is now by advice.

Bad like the new ’snowflake’ thinking about Churchill, Cecil Rhodes, Bomber Harris or even this month ‘Prince Charming’. All have done bad things it seems. Disney’s ‘Prince Charming’ is probably top of the pile for kissing Snow White without permission.

Back in the day, the reward for the ‘sale’ was described as a commission, successful sales people made a lot of it, the unsuccessful ones fell by the wayside.

By the way, people saved then, paid into pensions, had life cover and did not see advice as something to pay for as it was already included within the sales process- excuse the simplicity, but life was simpler then.

Today, success in sales is not measured in terms of commission, it is now called something else. It is a metric referred to as fee income- based upon advice from a professional. That person being highly qualified with a ‘proposition’ to offer but, with a product invariably attached.  As an aside that will doubtless bring scorn waves raining down, in most cases the fee for the ‘propositions advice proposal’ is closely resembling what was previously known as commission.

A successful advisor is measured in fee income. But really it is still ‘sales’. After all, if an advisor can find no paying clients to give advice to, they fall into the same category as those back in the day, a failure.

Mr Blunt should note that in financial services provider firms there are huge numbers of people who rely on advisors promoting their advice solutions for their livelihoods.

He should also note that most financial advisors are small business owners, if they are sole traders or in partnership, they carry responsibility to the grave at the moment for their actions.

I think that is what is called ‘personal responsibility’.

In any business, the sales people are the driving force yet for some reason, sales in financial services is a dirty word.  Even Hogan Lovells require business getters, people who can get new clients that they can charge fees to.

There are some fantastic people in this industry, many have come from a sales background. I am not sure how many regulatory staff have made the transition to sales in a commercial environment.

Oh, there is one, Rory Percival.

David Blunt “must be on them stair rods” (as Arthur would say), he should be careful what he wishes for.

There may be some out there like me, looking back over the failings of the various regulators we have had- NASDM, FIMBRA, PIA, FSA, FCA, asking Mr Blunt what consumer detriment his actions and those whose actions he manages could be accused of causing. After all, with some 19 years of his working life being spent in Canary Wharf (plus the last couple of weeks in Stratford) and looking with the #metoo generation mindset, there must be something?

But silly me, as ‘Sir Hector’ once said, if you want a regulator to take responsibility for what they do, nobody would want to do the job.

Those in regulation are the one’s who have failed the consumer. They are always right after the event, never show foresight or a willingness to apply forward thinking to regulation.

They kill businesses with that lack of foresight burnished with cost.

It is the consumer who suffers by way of firms passing on those increased costs and charges incurred paying to keep them safe from the detriment the regulator ‘coulda/ shoulda’ spotted years ago.

The question I would ask is “Are people who have risen to the top of the regulatory world with no real-world commercial experience or business success, the right people to be leading regulators today”?  

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FCA suggests clear out of sales dinosaurs

FCA suggests clear out of sales dinosaursArthur’s thought for the day: “You make contact with your customer. Understand their needs. And then flog them something they could well do without.”

I think this may be what one senior figure at the FCA’s perception of financial services sales ‘persons’ is?

David Blunt, head of conduct specialists at the Financial Conduct Authority, speaking at a recent City & Financial conference explained:“Where we want to get to is for firms to have a real sense of personal responsibility for all they do in financial services.

He then went on to say, “Are sales people who have risen to the top the right people to be leading today”? 

As a retired IFA and the founder of IFA community Panacea Adviser, I find his thought process deeply offensive. Is he suggesting that sales people are a sub class. Sounds a bit like the ‘Brexit remainer’ argument about leavers- that they were too stupid, too ignorant, racists, xenophobes……you get the drift.

His Linkedin profile shows him starting his career working for City solicitors Hogan Lovells going on the well-trodden path of articles through to a fully qualified solicitor.

I suspect that David Blunt has little knowledge beyond the walls of regulation and academia. After leaving Hogan Lovells in October 1998, his entire career has been spent in regulation of some sort. Firstly, with a couple of years at the Stock Exchange then from 2000 it has been climbing ever upwards at the FSA and then the FCA.

It was said that intelligence does not fit easily with common sense. The curse of the regulator.

We all agree that happy customers (positive outcomes is the phrase to use in 2018) are the key to any successful business.

But with a working life spent entirely in the world of regulation, I am deeply offended as is the fashion today, on the part of others too, that he should ask the question “ Are sales people who have risen to the top the right people to be leading today”? 

If his Linkedin profile is a yardstick, this is an individual who has no experience of what it takes to raise the money to start a business, especially a regulated business, grow a business, deal with all the troubles that can go with it or has any idea whatsoever about running a business. And amongst the hardest these days is a financial services business.

Sales are bad, sales-people are bad, regulators are good is the message spouting forth? Really?

Any business is built on the fact that it has something that somebody is prepared to pay for. Tangible, or in the world of financial services, intangible.

Any business requires somebody to sell the services, goods, or in the financial services world someone to ‘sell’ the ‘advice proposition’.

Nobody ever bought a financial services product. Historically they were ‘sold’ it, often by direct sales.

That is bad in 2018, it is now by advice.

Bad like the new ’snowflake’ thinking about Churchill, Cecil Rhodes, Bomber Harris or even this month ‘Prince Charming’. All have done bad things it seems. Disney’s ‘Prince Charming’ is probably top of the pile for kissing Snow White without permission.

Back in the day, the reward for the ‘sale’ was described as a commission, successful sales people made a lot of it, the unsuccessful ones fell by the wayside.

By the way, people saved then, paid into pensions, had life cover and did not see advice as something to pay for as it was already included within the sales process- excuse the simplicity, but life was simpler then.

Today, success in sales is not measured in terms of commission, it is now called something else. It is a metric referred to as fee income- based upon advice from a professional. That person being highly qualified with a ‘proposition’ to offer but, with a product invariably attached.  As an aside that will doubtless bring scorn waves raining down, in most cases the fee for the ‘propositions advice proposal’ is closely resembling what was previously known as commission.

A successful advisor is measured in fee income. But really it is still ‘sales’. After all, if an advisor can find no paying clients to give advice to, they fall into the same category as those back in the day, a failure.

Mr Blunt should note that in financial services provider firms there are huge numbers of people who rely on advisors promoting their advice solutions for their livelihoods.

He should also note that most financial advisors are small business owners, if they are sole traders or in partnership, they carry responsibility to the grave at the moment for their actions.

I think that is what is called ‘personal responsibility’.

In any business, the sales people are the driving force yet for some reason, sales in financial services is a dirty word.  Even Hogan Lovells require business getters, people who can get new clients that they can charge fees to.

There are some fantastic people in this industry, many have come from a sales background. I am not sure how many regulatory staff have made the transition to sales in a commercial environment.

Oh, there is one, Rory Percival.

David Blunt “must be on them stair rods” (as Arthur would say), he should be careful what he wishes for.

There may be some out there like me, looking back over the failings of the various regulators we have had- NASDM, FIMBRA, PIA, FSA, FCA, asking Mr Blunt what consumer detriment his actions and those whose actions he manages could be accused of causing. After all, with some 19 years of his working life being spent in Canary Wharf (plus the last couple of weeks in Stratford) and looking with the #metoo generation mindset, there must be something?

But silly me, as ‘Sir Hector’ once said, if you want a regulator to take responsibility for what they do, nobody would want to do the job.

Those in regulation are the one’s who have failed the consumer. They are always right after the event, never show foresight or a willingness to apply forward thinking to regulation.

They kill businesses with that lack of foresight burnished with cost.

It is the consumer who suffers by way of firms passing on those increased costs and charges incurred paying to keep them safe from the detriment the regulator ‘coulda/ shoulda’ spotted years ago.

The question I would ask is “Are people who have risen to the top of the regulatory world with no real-world commercial experience or business success, the right people to be leading regulators today”?  

*The brilliant actor who played Arthur Daly was George Edward Cole, who died aged 90 on the 6thAugust 2015

Alexa…..

In November 2017, the now ‘late’ Professor Stephen Hawking issued a chilling warning about the imminent rise of artificial intelligence. During the interview, Professor Hawking warned that AI will soon reach a level where it will be a ‘new form of life that will outperform humans.’

There is a move afoot to bring the delivery of financial advice into the 21st century. After all, with the smart phone, tablet and virtual reality all breaking through boundaries, why should financial advice not find itself in the vanguard of change?

It should work, could work, but will not work until something very simple yet clearly requiring a considerable volte-face takes place.

So, here’s a thought for you lovers of Steve Jobs and even Ned Ludd.

I had a e mail today from Marin Software. It started with this statement: “Advertise Where Your Customers Are” and linked to an interesting article around Amazon advertising opportunities.

It observes: “When buyers search for a product, they’re increasingly turning to Amazon as their first stop. There’s no doubt that Amazon advertising is on the rise, but is it enough to loosen Google and Facebook’s iron grip on the digital advertising landscape”?

Steve Jobs reckoned that “Older people sit down and ask, ‘What is it?’ but the boy asks, ‘What can I do with it?”.

Smart technology exists and is readily available in the average home. Algorithm based analytics are there, right now, to deliver for the mass market an automated method of providing the average family with the ability to self medicate their financial ailments and prescribe a solution.

This happens in many areas of web based life today so why not financial services?

Robo-advice must be in the cross hairs for Amazon, they sell pretty much anything for anyone and are the masters of the Algorithm.

Amazon presents the world of financial services distribution with a challenge and an opportunity, at the moment a simple search for ‘Financial services’, life insurance, ‘pensions’ or any other search permutation offers up hundreds of books, but no access to actual advice.

How long until you will be able to simply say ‘Alexa, a pension/ annuity/ life cover’. And for Amazon, no warehouse space, packing or logistics of delivery.

Mr Bezos, over to you.

black amazon echo on table

Photo by Fabian Hurnaus on Pexels.com

Who needs Arnie when you have this lot

There is a radio advert I heard for an organisation called Money Redress. Their campaign focussed on the miss selling of SIPPS, the hot topic today, passing by PPI and with much higher rewards.

The firm is not alone, in BBC speak, other claims companies are available.

A typical pitch is:
Not aware how the money was going to be invested? 

 Pressurised into making an investment

 Not fully informed of the level of risk involved

 Your money was used for a high-risk venture without your understanding or agreement

 Told 100% of your money would be returned but lost you money!

 The investment was unsuitable for your needs

 Access to your money was limited when you were told you would have full access

 You might also have been misled over charges

 Promised investment returns that didn’t happen

There are a number worrying things about the advertising style used in this case, the strap line for starters is to text “WIN” to the firm.

The firm in question has a relationship with a regulated advisory firm and that in a way is part of the whole problem.

Sadly, it seems that there is often a connection between CMC’s and IFAs, something the FOS is quick to point out. In the above scenario the CMC will use the regulated aspects of their business interests to move a potential claim along.

Many CMCs either have a connection to a former financial adviser, or even a connection with an investment product and may have sold those products before!

I am aware of one former adviser, who having retained client records he should not have done, going back to the former employers’ client base to engineer claims for advice he had given.

However, using former connections is not the only way CMCs are able to find the right data.

Some CMC’s are making ‘Subject access requests (‘SARs’). These allow the requesting CMC to see the client data held by a data controller at an advisory firm. SARs are not a right to request documents, only the data itself, yet the CMC’s try to use these ‘SARs’ to request all documents held about a client.

Any CMCs presenting SARs as a legal right to get copies of documents in order to manufacture a claim should not be, indeed the courts are clear that an SAR is a right to data, not to documents. In January 2004 the Court of Appeal was clear in the case of Durrant v FSA,  that an SAR is not a replacement for pre-action disclosure.

I have also heard that some CMC’s are looking to buy the database asset of defunct firms from receivers who are winding up the firm. The value not being the trail commissions but the files to trawl for blame to lodge a claim with the FSCS.

Financial services compensation culture has led to the expectation that a complaint can be a lottery ticket, purchased by simply texting ‘WIN’, that with a little luck can reap huge reward, irrespective of any truth or merit. Our recent FOS survey, with 212 respondents, showed that 72% of those advisers responding had experienced false or manufactured claims with a view to obtaining compensation.

Complaint resolution should always be based on the evidence available and if not on the balance of probability, factoring in the advice given in relation to needs and aspirations of the client at the time of the advice, not a complaint re-engineered 10,15 or 25 years later.

An active firm can defend that position, a defunct firm cannot and so off it goes to the FSCS who would have no idea if the claim false or manufactured. The outcome, in regulatory speak, is that firms then see a call from the FSCS to pay the CMC’s fees. You could not make this up.

The financial services industry is littered with examples of self-harm and opportunism. This type of proxy opportunism does the fight to restore trust little good.

FOS treating IFAs as ‘guilty until proven innocent’

Did you believe the FOS help complainants create a complaint where none existed?

This was just one of 15 questions answered in the FOS survey we ran during June & July which received 212 responses. Many thanks to all of you who completed the survey and for the hundreds of really inciteful comments that really put some flesh on the answer bones. As with all our surveys, it is the comments that make for such interesting reading.

The final ‘score on the door’ for that question? 66% believe that the FOS help complainants create a compliant where none existed!

Very worrying indeed, but it is some comments added, beyond a simple yes or no that should really start ringing bells with the FOS. For this question some comments were:

  • Where they feel inclined they will stray from the complaint in order to favour the customer with a positive outcome even if it has not been the subject of a complaint.
  • There was a case where a client was making a complaint against a DB scheme, but when FOS realised the company concerned wasn’t on its register, the FOS employee suggested the client complain against us!! 
  • I believe that complainants are apt to add to their initial complaint when in conversation with the Ombudsman and I know that FOS will look at the wider picture if they feel it is reasonable to do so 
  • Yes, there is no doubt that the process is not to seek a resolution of the complaint made, but to ensure that there can be no suggestion that the FOS have not investigated any opportunity for a clients’ complaint to succeed. 
  • The FOS demonstrate the view that all complainants are innocent and honest and that the Industry is corrupt and incompetent. So, if they can dig into a complaint and find an alternative angle they will do it

Another question asked was: “Do you think FOS rules and process place an adviser or firm in a ‘guilty until you prove your innocence’ position from outset or have you generally found them to be fair?”

83% agreed, some comments are:

  • I have yet to see an initial complaint letter which does not make the adviser look guilty, otherwise there would be no complaint. It has to be, therefore, that the adjudicator is biased towards the complainant until the defence is provided. 
  • Absolutely. To the point that I have decided to stop investment advising in the next 12 months. I now consider the risks too high. All of the cases I have read, or been involved in, seem to work on that basis – “prove that you didn’t do it”
  • Our Judgement was based on the argument that the complainants view had to be more likely and not just as likely as our own. 
  • It is difficult to answer this however the rules mitigate against a ‘fair trial’ and in that respect there is an imbalance. As Walter Merricks famously stated to a Cardiff Conference in 2003, it is like a game of football where one side is playing uphill.

Worryingly, we also observed the following:

—  55% of respondents had no idea as to who the FOS is accountable to.

—  72% had experienced false or manufactured claims with a view to obtaining compensation

—  95% felt that the adviser should have the same rights as the complainant to appeal to the courts when unhappy with a decision rather than an than expensive judicial review

Full results will be shared with you soon, but in the meantime, a copy of the results has been sent to the Treasury Select Committee, the FOS and the FCA.

As yet we have had no responses apart than from the FCA thanking us for “sharing the findings of your latest FOS survey. It makes for interesting and occasionally provocative reading”.

The survey results have also been picked up by FT Adviser who were interested to know if the report findings were perceptional or based on actual experiences?

Our view is that although we cannot be 100% sure, either flags an issue. If perceptional then the FOS has work to do the change those perceptions. If they are actual, then work is required there too.

We hope, in regulatory speak, that ‘learnings’ will be taken from this to ensure that the original intent for any Ombudsman is to resolve complaints based upon the balance of probability and/ or any evidence that may be available.

We do not look to favour one side over the other, but looking at all of our FOS surveys from 2011 to 2018 there does appear to be a consistent  and ongoing view in the world of financial advisers that simply cannot be ignored.

To view full results click here

Read the article in FT Adviser

Trains, planes and?

Trains, planes and?

Have phones at work become the new smoking in the workplace?

A walk into any office, anywhere in the UK, will make clear that attention to the job in the workplace during working hours is being jeopardised by the use of mobile phones.

Mobiles are everywhere today, you cannot escape them. In the office, on the train, in the street, the office, the plane, the underground, cinema, restaurants, theatre, gym, spa, saunas- all areas I have experience of although I may have forgotten some.

Even the delivery room is not out of bounds. Constance Hall, in our image, has snapped back at ‘mummy shamers’, who said that it was ‘poor parenting’ for her to be on her phone!

The streets are being walked by individuals in a zombie like trance, gazing in thrall at screen content- a book, an e mail, a movie. Even mothers with babies in prams and pushchairs are not exempt. And in some cases, sadly, death has followed.

A recent RAC Report on Motoring revealed a significant increase in the number of drivers admitting to using a mobile phone at the wheel. According to the report, between 2014 and 2016 this figure has risen from 8% to 31%. Regardless of the reason, any distraction behind the wheel can lead to accidents, severe injuries and car write offs.

In January this year, the Trump White House issued a new ruling banning the use of personal cellular devices in the West Wing, citing security concerns

From what I see on my way to meetings around the country, mobile dependency is so bad that the use of phones is almost the equivalent corporate time waste of office smokers who regularly decamp for a puff at the expense of their non-smoking co-workers although I guess some multi-tasking with Phone and fag could occur.

I would be the first to declare that I have an iPhone and iPad, but I yearn for some quiet time both in and out of the office.

Train journeys are a nightmare, even in so-called quiet carriages. You are never more than a seat away from some idiot shouting down a phone. Along with their loud summaries of the most important business deal ever done by anyone, anywhere, anytime, conversations also contain stock phrases like ’I am on the train’, ‘Sorry, I just went through a tunnel’, must be a dead spot’, ‘can you e mail me that’, ‘sorry can you say that again’.

The conversations often contain corporate buzz phrases like:

At the end of the day, Sophie will take the lead on this, Colin will be having a 360,Ecosystem, Better run this with the scrum master, start building consensus, We’re working in silos here…….I could go on, perhaps you may wish to add some that irritate below?

“Distracted walking” incidents, according to the National Safety Council “are on the rise, and everyone with a cell phone is at risk. According to a Governors Highway Safety Association report, there were nearly 6,000 pedestrian fatalities in 2017. This number mirrors 2016 fatalities”.

We are losing focus on our surroundings and putting our safety – and the safety of others – at risk.

The solution: Think about your surroundings and those around you. Stop using phones while driving, walking, in the gym, spa, getting off trains, buses and planes, on crossings too. Amazingly over half of so called distracted walking injuries occur in our own homes, proving that we need to stay aware of our surroundings, whether they’re new or familiar.

We have all sorts of ‘cause’ days, weeks or months in the UK today, the time has come to have a ‘cause’ month for not using a mobile device for calls, texts and e mailing in ALL public places?

The Three Certainties of Human Life are Death, Taxes, and more regulation

The Three Certainties of Human Life are Death, Taxes, and more regulation

“The regulator has found concerns over value for money in drawdown, including significant variance in charges, which can be complex, opaque or tough to compare, so has set out plans to force firms to show a one-year charge figure in pounds and pence in the key features illustration they provide to consumers”.

It is a commercial world out there and I can think of no other industry that has a regulatory insistence that charges for what they make/ build/ sell have to be granularly declared.

When you buy a new house, is there a breakdown of building and material costs supplied with the contract? The same with a new car: design.testing, parts and labour. A prescription drug does not come with a breakdown per tablet for research, development and testing, a holiday cost does not breakdowns for flights, hotels, food, drink or flight. Supermarkets do not declare what the business costs are for selling you a pack of sausages.

A bit simplistic I know but if regulation stops messing with fixing what in many cases is not broken and more people use a financial adviser, the world of independent advice and consumer trust may be a better place.

As an owner in the 1970’s of a waterbed (with the attendant life affirming fond memories) the illustrative metaphor of the movement in a water-filled mattress seems to be a common sense albeit simplistic description supported by a little known mathematical formula called Bode’s Sensitivity Integral.

Bode’s waterbed theory ‘outcome’ is already well illustrated in the mobile phone and utilities industries where regulation and political interference fixes or manipulates the prices of basic products and services only for consumers to see complicated pricing structures ensue by way of significant increases in the price of peripherals and additional services as a direct consequence.

Thiseffect is a phenomenon that should increasingly cause concern to those who regulate the industry and those it regulates in regard to pricing and the detriment the post RDR world has wrought upon the intended beneficiary- the consumer.

It is the natural but not necessarily intended potential to squeeze one part of a complicated and complex regulated business model (and the attendant regulatory processes) to cause a serious bulge elsewhere in the process.

So, the theorising in RDR should have foreseen that in achieving:

  • the elimination of bias in the market
  • ensuring the adviser is the true agent of the consumer
  • clarity over the costs of advice
  • and various other factors,

the industry would no doubt see the bulge appear somewhere else.

And this has been seen in costs in every conceivable way and particularly for consumers.

Cost is something that FCA regulation incurs for firms, often with little thought of logic or affordability and with little benefit analysis being done on the consumer impact and detriment it created.

So how else did the theory manifest itself?

In ensuring the adviser is the true agent of the consumer, the result was that the mass-market consumer did not, does not want to pay for advice that had previously been seen as free.

When a consumer is able to obtain lower prices from an adviser or a provider for drawdown, is it possible that other consumers will have to pay more for the same input from another adviser or provider firm as a result?

Is this bad for consumers?

The asymmetric exercise of regulatory or consumer power can lead to consumer detriment through raising other consumers’ advice and provider charges- the Waterbed effect.

While a large and powerful provider firm or distribution channel improves its own terms by exercising its market power in getting cost reductions, the terms of its lesser resourced competitors can deteriorate sufficiently so as ultimately to increase the average price of advice – the Waterbed effect.

It seems to me that the only organisations in the world of financial services that should raise serious “concerns over value for money, including significant variance in charges, which can be complex, opaque or tough to compare” are the FCA, FOS and the FSCS. 

We never see a breakdown of costs, budget breakdowns yes but costs????

IFA Antony Cousins at SPF rightly comments that “value for money has always been important to clients, however with returns from financial products expected to be lower over in the short to medium term, the level of charges are now even more relevant.  For many years Financial Advisers Fee Agreements have had to specify the exact service(s) being provided and the associated initial and ongoing cost in pounds and pence, hence I see no reason why providers illustrations for drawdown should not follow this model”.

He goes on to note that this should be“coupled with an educational programme to enhance customers understanding of a highly technical area would remove some of the scepticism in the industry”. 

There is some suspicion that the FCA are more concerned about clients going direct to providers in this drawdown market and not taking advice where we have to stipulate and review all these costs.

Regulation has created a race for the bottom on price. I am not sure that the average consumer ‘buys’ financial advice on the cheapest cost. I think that for the mass market consumer it could be about not paying anything at all as they see the pension plans providers they have been invested in for years should provide that advice for free.

This is in turn a problem for providers who are predominantly distributing their products via the intermediated channel. They do not want to carry out work, with added customer care regulatory liabilities or redress, that they see, is an IFAs role. But if the client has either been disenfranchised by RDR segmentation or just does want to pay what else can be done.

Waterbed effect at work again????