23 Jan 2012
He has been sent a copy of the report but I suspect that he may not like what he hears. However, he should remember the words of Winston Churchill who said, “Courage is what it takes to stand up and speak; courage is also what it takes to sit down and listen”.
We conducted our survey over a two-week period in December dealing with, in particular, the attitude of clients of IFA firms toward the RDR. The key finding is that the general public does not understand and are just not ready to engage with a fee only advice regime.
The results cause me considerable concern so I have shared them with Hector, Mark Hoban, the chairman and key members of the Treasury Select Committee plus the ABI and AIFA.
Whilst it would be possible to dismiss some aspects of the survey, as well as some of the methodology, the responses and results do carry weight because of the strength of response and depth of comments.
It appears that the issues raised have not been addressed in either FSA research to date or their awareness plans.
In fact the results of this survey are so alarming I must ask why the FSA has not conducted similar research with IFAs or their clients and why they appear to have no visible plans to "educate” the public about what you have created.
This survey poses three very simple points to ponder:
With consumer attention being diverted by domestic economic matters and the distraction of the Olympics the FSA have little time to act.
The point this research reveals is that there is an awareness creation problem, rather like making seatbelt wearing compulsory, the digital switchover, the dangers of Rabies, binge drinking or having unprotected sex on holiday and that requires a sponsored message from the FSA to tell the public “this is how it will be in future” and not from provider firms or IFAs.
No doubt Sants will argue that this is a job for the Money Advice Service. But that appears to be setting itself up as some kind of honest broker service.
Our survey is all about preventing consumer detriment by digesting consumer perceptions, understandings and appreciation of the RDR from those who know them best their IFA.
On all counts it is clear that what the RDR will produce for the masses, unless some sense of reality is brought to bear, is the most spectacular case of consumer detriment in the name of regulation, by the hand of regulation that anyone has seen since the OFT decided that the MCA (Maximum Commission Agreement) was anti-competitive.
The message to Mr. Sants is clear. Please listen, learn and above all act now before it is too late for Mr and Mrs Average that is if the FSA actually cares about them ahead of their own egos and agendas.
The survey saw some 741 respondents and the results, with comments, stretch to over 150 pages. The document makes for compelling reading.
Some key facts to digest
So will Mr Sants be surprised? He certainly should be along with all those who have concentrated so much on driving through a process that, if this survey is to be believed, has so far manifestly failed to consider the basics of the relationship consumers have with their IFA.
This survey also addressed IFA readiness for RDR and how their plan to align their businesses with the RDR requirements was progressing.
This element of the survey has painted an interesting, often very positive picture but within lays some disturbing evidence that again we think should be considered by the FSA, ABI, trade associations and accreditation bodies.
Our respondents come from all over the UK, including Wales (apologies for the oversight in the survey). The age demographic and their time in the industry show that the opinions and views are made with the considerable benefit of “time served” experience.
So what next for the next 11 months?
The late Steve Jobs was on record as saying about Apple technology products “this is what customers pay us for - to sweat all these details so it's easy and pleasant for them to use our computers. We're supposed to be really good at this. That doesn't mean we don't listen to customers, but it's hard for them to tell you what they want when they've never seen anything remotely like it”.
The FSA should now see that they have not listened to the consumer, in fact they have not really tried to engage with them at all if our survey is anything to go by.
Action is required now and that starts with at least creating consumer awareness and that is not the responsibility of anyone else except the FSA.
So as Steve Jobs might have said “Hector, sweat all these details so it's easy and pleasant for consumers to get the advice they want, from who they want and possible even let them pay them in whatever way they want, they've never seen anything remotely like RDR and I suspect they may not like much of what they see”.
To access the full survey results and comments, click here and log-in with your Unipass or type in your Panacea account details . If not registered, follow the simple free registration prompts. The full report, with comments, is essential and thought provoking reading.