What do I do when lightning strikes me?


The phrase “pigs can fly” means something that you say which means you think there is no chance at all of something happening.

So it was with some sense of irony that I read; “FSA upholds complaint following its customer contact centre giving the wrong advice to an adviser, admitting its service fell below its “usual standards”.

I think many would find the above statement very hard to believe but it is clearly true, a rare admission and refreshingly welcomed.

Yet it is very worrying at the same time. Now, the FSA state that if advisers are not appropriately qualified or waivered they are not allowed to advise under supervision post 31st December.”

The FSA’s customer contact centre had told David Chubb, of Sussex-based David Chubb Financial Planning that it was in order to use a locum until he achieves the required level of qualifications for post RDR trading.

But they did not confirm it in writing.

David Chubb contacted us and outlined the situation as follows;

I had wanted to know if my locum could deal with the advice work, and I would deal with the para-planner aspects during my extended study period. My wife and I have suffered ill health – she spent time in hospital at the beginning of the year after a suspected heart attack, and I have had two adversely complimentary medical conditions for 2/3 years, which have caused me severe sleep deprivation (sleep apnoea I cannot get on with the CPAP machine to ease this), coupled with an enlarged prostate.  An operation in March 2012 helped significantly.

I began studying in April for the level 6 CISI, PCIAM exam: I thought, if I have to do an arguably controversial exam to requalify at my age and level of experience, I wanted to take one that best fitted by business needs and interests  it wasnt the easiest route, and few IFAs have taken it I am told. Incidentaly, my firm has been fee based for most of its existence (20 plus years).

Admittedly it was a particularly tough exam to expect to pass in a short space of time (especially as it is generally aimed at stockbrokers and investment bankers), with a final chance to qualify for the RDR deadline being the September examination. I have not been a slouch in the circumstances, and anyway the issue here was about the FSAs incompetence. I am aware that I can apply for an extension on health grounds and am in the process of doing so I had wanted to cover all potential options to keep my business going until I pass the PCIAM exam in case my application for a waiver was rejected. It most certainly wasnt an attempt by me to beat the system.

Kind regards


David R Chubb MIFP Cert PFS   Financial Planner, Investment and Wealth Manager

And as we work in such a highly regulated industry the golden rule in any such circumstances is get confirmation in writing.

We learn that the FSA wrote to Mr. Chubb, confirming he had been given the wrong advice (I would assume they found a telephone record and possibly some system notes to support the complaint) apologized and moved on.

But this raises some important questions:

  • Why is a locum not acceptable
  • Would this decision be the same if Mr. Chubb relied on a locum while on study leave?
  • If a locum is not acceptable, and the FSA admit an error, should they not cover any costs incurred as a result of their incorrect advice
  • How is the firms PI cover affected
  • What is the trail position if his firm has no CF30 adviser registered?
  • How many other advisers are in this position?


I would be interested in some feedback on this subject and also if there are any consultancy firms who can assist advisers finding themselves without the qualifications on January 1st

Captain Blackadder definitely did not shoot this delicious plump-breasted pigeon!


FSA head of investment intermediaries Linda Woodall was reported as saying: “We are encouraged to see a large number of advisers plan to provide advice to people with smaller pots to invest. It is important that a range of services will be available for consumers once the changes to financial advice come in.”

Really? What is a large number of advisers, how do they know? Is this a case of the FSA being told in a survey what they want to hear rather than what they need to hear?

The FSA’s findings follow research published by Deloitte earlier this month, which estimated up to 5.5 million customers would stop using, or lack access to advisers post-RDR as a result of adviser charging.

Now, if the FSA assumptions are correct it will be in large part due to the in-built sense of customer care that advisers have for their clients.

But, if they are wrong and client requests to their adviser cannot be dealt with on a pro bono basis, and they will not pay a fee, what happens?

Well to quote Captain Blackadder ”A large crisis requires a large plan”.

But I think there is not one.

To parody what Blackadder might have said,  “Come on George, with thousands having lost their jobs in this industry in the last year or two, who’s going to miss a small IFA next year? 

And we are trying to find out what the true landscape of RDR shifting sands is.

Can you help us to help you by completing this important survey?

So far, a few ‘hot of the press’ insights are showing that:


  • Strength of client relationship is almost as important as AUM when segmenting clients
  • Most plan to offer differentiated services to meet diverse client needs
  • Preference for adviser charging through the product vs. fee paid direct by client
  • Move to restricted may be higher than the FSA claim


Do you agree? 

We have extended our survey to run until Wednesday 5th December. So please take the survey today, it will only take up 10 minutes of your valuable time.

Results from a survey like this could cost a firm around £5,000 and advisers often would not get sight of it. However, to recognise the importance of your input, these will be shared in December with you for FREE – the most important person in this exercise.

The results will allow comparison of your RDR problems, experiences, successes, failures and solutions with your peers that will no doubt help you fine-tune your newly formed proposition.


Thank you in advance for your assistance in completing this survey.  Simply click on this link to begin.

Doing Ethics with Style(s)!

More green than glam perhaps – but in the world of ethical and sustainable investment Style still matters!  Not offering green or ethical investment to clients is looking increasingly dated these days, but finding appropriate fund options can be hard work.  And this is where a knowledge of Style – or more precisely – SRI Styles – can be hugely helpful.

Investors’ tastes vary greatly and advisers need to be able to consider a range of options both from an ethical and an investment perspective.  Advisers normally have access to a wealth of information on investment issues – but information on ethical or green investment can be far harder to find.    The purpose of the Panacea Fund EcoMarket tool is to address this.  The tool groups ‘Sustainable and Responsible Investments’ into a number of Styles based on their approach to ethical and other ‘extra-financial’ issues.  These Styles can then be matched to clients’ ethical/SRI aims in order to help you find relevant fund options quickly and easily.

Whether your clients take the view that sustainability is a growing business issue that should not be ignored – or have personal views that could make investing in some areas uncomfortable for them – there is an SRI Style for pretty much everyone now.

The Panacea Fund EcoMarket tool splits the green and ethical – or ‘Sustainable and Responsible Investment’ – market into seven main Styles.  The Styles system clusters the main SRI fund approaches into groups that help advisers to understand the major features of what funds actually do and so helps advisers steer clear of some common pitfalls.

The seven main SRI Styles on the Panacea Fund EcoMarket uses are:

  • Traditional Ethical (negatively screened funds)
  • Balanced Ethical (screened funds that ‘balance’ positive and negative company issues)
  • Faith Based (funds that invest in line with a specific religion)
  • Sustainability Themed  (funds that consider a wide range of sustainability issues)
  • Environmentally Themed (funds that focus on environmental issues)
  • Clean Technology   (specialist clean technology funds)
  • Responsible Engagement (funds or asset types that employ dialogue and voting based responsible investment strategies)

Yet these Styles are only useful if you know a client’s Style preferences.  This is why (following advisers’ requests), as well as there being an SRI Fact Find questionnaire within this tool there is also a client microsite. This site carries brief, client friendly, explanations of the Styles – as well as an  online SRI client fact find questionnaire.

Once completed the questionnaire generates a list of preferred SRI Styles for your client to discuss with you.  To generate a list of relevant SRI fund options all you then need to do is add their Style choices into the adviser database tool alongside some other basic fact finding information.  Start to finish this should take no more than a couple of minutes!

Very stylish and increasingly popular… research carried out for UKSIF during National Ethical Investment Week last month by YouGov, found that ‘58% of GB adults with investments expect IFAs to be able to advise them on how green and ethical issues of interest to them might shape their investment choices’.

If correct this would indicated that interest in this area is set to increase post RDR.  Couple this with the fact the FSA mentions this area in a number of places in FG12/15 and that ISO22222 requires advisers to ask SRI fact find questions and the trend is clear…

The Panacea Fund EcoMarket tool is a free resource for advisers who want to integrate SRI into their business models and advice processes, enabling you to do ‘ethics’ – with plenty of style and no drama!

Julia Dreblow

Director, sriServices


Panacea Ethical Zone:  http://www.panaceaadviser.com/main/p4/16,0,0/ethical+zone.htm

UKSIF research: http://www.neiw.org/about/media-centre/great-expectations-post-rdr-public-expect-ifas-advise-green-and-ethical-issues

sriServices home page: http://www.sriservices.co.uk/

Advising on SRI: http://www.sriservices.co.uk/advising-on-sri

Eurosif report shows HNWs leading the way: http://www.eurosif.org/

Not just any old RDR Survey

In November 2011 the Panacea community took part in a survey designed to tell Mr. Sants and the FSA what they felt about RDR.

Response to the survey was simply incredible, being completed by over 750 advisers who provided a wealth of feedback.

Importantly, the research did reach the attention of Hector Sants and Martin Wheatley as it highlighted the woeful fact that the FSA had not thought at all about RDR awareness creation and who should do it.

Twelve months on, we are getting very mixed messages about the considerable challenges and opportunities posed by RDR?

  • Will your business be ready?
  • Will you be ready?
  • Are your clients ready?
  • What support do you need?
  • What message do you want to send to the FSA?

As a result, we are conducting further research, in collaboration with our partner Market Research Agency GfK, to enable us to better understand current trends and attitudes.

The survey will be running from 14th November to the 28rd November. Unlike some recent formal RDR surveys, we are doing this as we really want to help you and most certainly not catch you out!

Importantly, the results will then be shared with you to allow comparison of your experiences with your peers, something that does not often happen.

Please let your industry colleagues know about this survey too. Ten minutes of your time will be, we are sure, very well spent and the results no doubt enlightening for what will be a very interesting year ahead.

Thank you for your assistance, to complete this survey, which we really hope you do, simply click this link

PPI Madness – Shelter from the storm. PPI Madness continues with the ‘not sold’

Lloyds has set aside yet more money, a further £1 billion in fact to cover its payment protection claims. It has also made provision for £2.07billion (yes billion) to be set aside to cover a positive tsunami of potential PPI claims on their way.

Barclays saw profits hit after making provision of some £850m to compensate for miss-sold PPI. In total they have stockpiled £1 billion this year as they are seeing “higher than previously anticipated levels of PPI claim volumes.

The complaint numbers are simply staggering. RBS/ NatWest received 365,000 PPI complaints from January to June. HSBC had 170,064 complaints and Spanish bank Santander said its complaints rose by 42 per cent this year.

How did this get so bad?

Did nobody spot the warning signs, did nobody see that policy restrictions would mean that so many would never see a successful claim outcome.

PPI miss-selling is a disgrace to the financial services industry, furthermore it has fuelled a sub class of ambulance chasers who now feed on the ‘not-sold’– those who have never even had such a policy.

An example of this arrived in text form on my wife’s phone on the 30th October, it said:

“Records passed to us show you’re entitled to a refund approximately £2130 in compensation from miss-selling of PPI on your credit card or loan. Reply INFO or stop”

It came from a mobile, probably based in India or Spain; 07760 7377. My wife has never had such a policy.

Anthony Bolton, Principal Officer, Claims Management Regulation Unit at the MoJ provided some good advice on dealing with these texts:

Don’t reply to the text message. The messages are usually sent in their thousands by data farmers trying to establish which numbers are live, so don’t respond to the number at all (not even STOP or anything not as polite) as this may result in a whole host of other marketing texts/calls (not limited to claims management).

Our difficulty here is identifying who is behind these messages. Different people can be behind the sending of the message, receiving any responses and those who follow them up (the data being sold on). We are currently working with the Information Commissioner’s Office, OFCOM, the Direct Marketing Association and the network operators to tackle the issue.

There are a couple of things we recommend people receiving text messages to do;


  1. 1.            Forward the text message to your (wife’s) network operator who will use this information to try to disable the number it came from. The operators have come up with a short code number to forward messages to. It is 7726 on most networks (or 87726 if it is Vodafone).
  2. 2.            Provide the information to the ICO via their online survey https://www.snapsurveys.com/swh/surveylogin.asp?k=134674895144. They are acting as the intelligence hub for this type of activity and possess the powers to deal with those breaching the Data Protection Act and the Privacy & Electronic Communications Regulations.

 The ICO have identified a number of targets and we are awaiting their final decision on the first notice they have issued re. their intention to fine two individuals in excess of £250,000. The story got a bit of publicity a few weeks ago and we hope that this will be a significant step in tackling the problem (http://www.ico.gov.uk/news/latest_news/2012/illegal-marketers-set-for-six-figure-penalty-01102012.aspx).

I will also make a note of the text on our system to see whether this ties in with any other information we hold to help identify the sender”.

Where does the blame lie? Well I guess with the architects and manufacturers initially, mostly banks, and then to the incentivised sellers who need to ship the ‘product’ to an unsuspecting customer.

As Dylan sang “Well the deputy walks on hard nails and the preacher rides a mount. But nothing really matters much it’s doom alone that counts”

And that doom now extends to a sub-class exploiting an almost unregulated marketing opportunity of the very worst kind. As they say, out of adversity comes opportunity in this case the ‘not-sold’?

PPI clearly falls into the realms of regulation, where was the regulator while this multi billion pound toxic mess was being incubated? If there was ever an example of a product that needed regulatory approval- a licence to say ‘fit for a defined purpose’, this is it.

You can learn a lot here on how the MoJ deal with spurious CMC complaints, a simply huge problem.

Say it’s not so!

Over the last four weeks we have been running a snapshot poll on RDR readiness. Over 600 have responded and so far only some 21% of respondents say they will be ready

This is currently showing that very few advisers will be ready by the year-end. With only 52 days left, what are the problems that are causing this very sad picture to be revealed?

We will be doing a more in-depth survey in the next week or so that I hope will provide a more granular insight into the problems and hopeful assist in delivering some support solutions to “those in peril on the sea” of change.

Lee Werral from CEI Compliance has some thoughts that are worth sharing with you right now. He observed that;

“The results are hardly surprising. RDR readiness is a very generalised and overused term that can mean many things to many people. One argument I have heard recently is that many firms are unprepared, as they have only had 6 years notice, whilst the counter has been that many rules for the ultimate landscape have only been laid down in the last 12 – 18 months.

So is the question being asked meaning that there will be full competence for 1/1/13; or maybe that IFAs expect to have their systems and controls in place by that time, or have they fully prepared their client base for the change and got their disclosure and proposition documentation in place?

Or all of these?

There is still time to engage a qualified someone to look at the whole setup within each firm to assist them to be RDR ready and to provide an external assessment of the readiness with recommendations and “sleeves rolled up” assistance if it is needed.

With the firms we have worked with, preparing them for “RDR Readiness”, other than competence, we have identified a number of areas that need to considered and discussed including;


  • Business Vision and Mission Statement
  • Business Plan
  • Target Market
  • Industry Analysis:
  • Client Segmentation
  • Marketing & Sales
  • Your Service Description
  • Mistakes to Avoid
  • Operational Plan
  • Financial Crime Systems & Controls
  • Data Security
  • Combating bribery and corruption
  • Remuneration
  • Technology
  • Investment Process
  • Focus on risk and return – profiling
  • Growing and Recruitment
  • Compliance & Risk
  • TCF 
  • Management Team
  • Joint Ventures (JV) 
Appointed Representatives – The Firm’s Responsibilities
  • Exit Strategy
  • End Game Planning

So if the question is are all these things in place or documented, the responses are unlikely to be yes, as many of these areas have not been fully explored. As far as being technically ready by all the competence and operational requirements to satisfy the FSA, then I am sure the great majority will be yes, (but will be more ready in the next few months).

Dogs Breakfast?


So now we have it, the FSA has been given the EU nod of approval to ban commission payments from providers to advisers in it’s implementation of RDR next year.

The EU parliaments final version of Mifid also makes clear that a ban on commissions or other financial inducements for independent adviser firms will apply across Europe too. But just to help create confusion the definitions of independent differ and the resulting outcome will be that independent advisers may be treated differently to those who are not or who may offer restricted advice.

Mifid is the key piece of EU regulation that is set to transform the way a range of instruments are traded in Europe. It aims to update and build on the reforms introduced by the 2007 directive, it is the European Commission’s proposed view on what the new rules ought to look like for all EU member countries.

The UK government does not often have influence or success when EU regulation collides with UK law but on this occasion there is some acknowledgement that individual countries regulators can plough their own furrow to a degree, so RDR looks safe as the FSA can press on with its RDR commission ban.

But there is genuine concern that these ‘just before midnight” changes and clarifications will raise very real fears that those choosing to plough the independent furrow will be treated differently to those who are not.

The EU Parliament voted on the final Mifid wording last week and it passes, when intergrated into the Council’s wording, into EU law

The skeptics out there should note that there is no reference to restricted advice and this will no doubt see the UK playing field being marked out differently, a sort of imperial versus metric job meaning the same but different.

The EU definition of independent advice is seen as considering “a sufficiently large number of investment products” which are “sufficiently diversified [by] type and issuers or product providers to ensure that the client’s investment objectives can be suitably met”.

Importantly though recommended products must not be limited to those offered by providers with “close links” to the adviser firm.

IFA Simon Mansell observed in FT Adviser On the 06/12/10 Michel Barnier, Commissioner for Internal Market and Services confirmed (to me) that the FSA would be unable to restrict inwardly passporting firms offering their services post RDR. For those subjected to FSA regulation they will be placed against heightened competition from other EEA states, paying commission not fees and they (UK advisers) will be unable to respond because their hands are tied by a rope called RDR. 

The FSA is not accountable to Treasury Ministers or to Parliament, and now it seems Europe! European Union law operates alongside the legal systems of the European Union’s member states but where conflict occurs, takes precedence over national law and that will include even the FSA! It seems that the FSA does not take this view!

So the

What is Mifid? Just the basic facts, can you tell me where it hurts?