19th March 2012
Saints not Sants
The curious thing about the RDR and all the commentary surrounding its arrival is the context of the industry as a whole. Forgive me for thinking with a partisan view of the world, but the last time I looked, there was still a massive demand for financial advice of all shapes and sizes for every man, woman and child in the country.
What there isn't however is supply from overseas advisers who think they can do a better job and for less money. So why then is there a concerted effort to try and restrict advice to those who can afford it. Say what you like about the 'good old days', but there was a certain harmony about the obvious cross subsidy of advice costs that went on. Fair or not, most people quite liked it.
Take a simple example of another industry that has been decimated in recent years. Coal mining became unprofitable in the UK because of cheaper imports, so pits were mercilessly closed. No one wanted them to close; they simply had to, to stem the flow of good money after bad. The industry was simply overtaken by external forces of cheaper supply.
Our own industry on the other hand, has all the demand it needs, so why are the lives of countless advisers up and down the land being made utterly miserable when they are actually desperately needed to satisfy the demand? And where does the increasingly sinister Money Advice Service fit into all this?
It's tempting at times like this to simply write out a hundred times "Please leave us alone to get on with things; we'll find our own place in the world without you trying to do it for us" So I'll try to put it more eloquently. Far from preventing abuses, complexity creates loopholes that the shrewd can abuse with impunity. Is that any clearer I wonder?
What the FSA and other policy makers need to do is step back and count their blessings, and appreciate what they have. They need to make lives simpler and easier for the very people who generate billions in revenue for this country, and maybe at last start to address the dramatic problem of the savings shortfall.
Exam burden is a further issue that is causing increasing stress amongst our ranks. I had to double take a while ago when I read that it was feared up to a half of advisers would simply throw in the towel and retire come 1stJanuary 2013. Is this completely necessary do we think? Even though Thameside are well placed on this front, we all know that the best way to have done this was to raise standards from the bottom up; it would have been slower I grant you, but fairer. All that is going to be achieved is a dearth of advisers and a further fall in savings and cover. Nothing's really been achieved, not least of all a raising of ethics and morals.
I can already hear the howls of protest from "RDR ready" advisers, but that is a bit like rich people asking us all to go green, do some charity work and give money to the poor; OK if you have lots of spare cash, but for most, it's simply not practical.
A version of this first appeared in Money Marketing 14th March
Tom Kean is director of IFA firm Thameside Wealth
Comments (2)
1. If the demand is as great as he says it is – and I have no reason to doubt him – then simple economics come into play. The rule of supply and demand state that if he is correct, then the ‘demanders’ will pay the price.
2. With regard to cross subsidies I dispute that most quite liked it. Most didn’t realise they were subsidising someone else. If they would have been aware there would probably have been hell to pay. I wouldn’t like it, so why should my customers. I don’t pay more for my car so that others can afford the same model.
3. As I have said so often in the past, current exam requirements are not a burden. If any adviser who has been in the industry more than 10 years didn’t realise that he would have to be qualified than he made a pretty good impression of an ostrich.
4. The assertion that thousands will drop out after this December is speculation. As are the reports that the effect will be negligible. The proof awaits us, but I’m inclined to believe that the hysteria is a little overdone.
Thant being said I am certainly no ally of the bureaucrats and do agree that we can all do with the much vaunted by little evidenced reduction of red tape and that enterprise and hard work should not be so fettered. But then what do you expect from politicians and bureaucrats? They have to justify their largely worthless existence.
Harry Katz
Norwest 20/03/2012 10:03
Shamefully they leave a trail of ruination behind them for others to pick up. Perhaps the greatest testament to Sants, Nichol et al would be if Hoban actually had the courage to postpone the RDR, as the TSC recommended and he did a Fagin and "sit down and think it through again.!" But of course he won't. The entire scenario of these rats leaving the sinking ship is a total disgrace. And throughout lour industry eaders like Jim Reeve should have put their heads above the parapet and questioned the entire project.
Have we all not been saying for the last 3 years that the FSA is a disfunctional, discredited quango with little understanding of what we actually do. Sants running away like a little boy who has just thrown a stone through somebodys window is the final proof.
Woodstock 20/03/2012 10:56
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