Following our recent survey on trail and the snapshot poll we did late last year, I can report that we have now had a meeting with the FCA to discuss adviser concerns.
The meeting took place with Clive Gordon- Head of Investment Advisers & Platforms Supervision, Richard Taylor- Savings, Investments & Distribution Policy, Risk & Research and Michael Newton from the Long Term Savings sector.
It is interesting to note that Richard is tasked with looking at unintended consequences of RDR. He did a lot of writing during the session.
From our corner, we had Garry Heath, Lee Travis from NMBA and Sarah Paul and myself from Panacea Adviser.
Sadly we only had one hour of time allocated by the FCA but I do believe we did get some of their attention around a number of key issues. I attach a copy of the mail I sent to Clive Gordon that will assist in ensuring that as many concerns as possible can be looked at.
In particular we wanted to ensure that there was a clear understanding of what trail actually is, what it means and why it is so important, especially to firms with many years in business.
We wanted to ensure that trail from legacy products was not removed and that some clarity was given around this subject as it is the view of many that it is only a matter of time until either the regulator or the providers remove this.
The FCA sees trail as being something that should see an ongoing service, this is not necessarily contractually the case with legacy trail, especially where firms did not take initial commission although some purists may take a very different view.
It would be fair to say that many of the possible consumer detriment issues we highlighted had not been seen until now. Neither had the impact that removal may have on the viability of adviser businesses as well as the almost complete destruction of embedded value being amongst them
Garry made some very powerful representations based on his current and past experiences and was rightly critical of APFA, who many see as not having stepped up to the plate when it was most needed.
Strangely, the FCA don’t believe it is their responsibility to help advisers communicate to clients the impact of regulatory change but accept they need to more clearly communicate to advisers and accept that there can be confusion with clarity of some of their communications with the caveat that some empirical proof should be provided where possible
We agreed a number of steps need to be taken, Clive was very keen to make the point that the FCA was not about to unravel RDR, and that they would not guarantee that they would make any changes in regard to concerns around trail removal…… but they did say they would listen, and would want to meet with us again on a regular basis.
And that is a starting point.
They also made it clear that they want to move away from FSA way of doing things.
Actions to follow will include working with the FCA to create an adviser guide around trail matters, because trail matters a great deal.