Thank you for your feedback.

There does seem to be a lot of “word overload” out there! At our Best Practice meeting on Monday afternoon we were sharing with the team the Guidance consultation from the FSA-Retail Distribution Review: Independent and restricted advice. I commented that I believed the 16 pages in that document could easily have been done in 4!

The FSA/FCA is perfectly capable of doing this. For example consider the 11 Principles as avery good example of how it could all be done

I may just be in a pessimistic mood but the momentum seems to be towards even-longer-winded-than-ever regulation that tries to button everything down. It’s not just the FSA or the UK at large. I have recently been introduced to FATCA and Dodd-Frank. *Shudder* I can only hope we see the pendulum swing back in the direction of your commonsense. Who knows, maybe us everyday folk would actually be able to remember all the rules off the top of our heads and concentrate on things like doing our jobs rather than keeping up with regulatory change.

Thank you for your feedback

I like the thought of “self regulation” I also like the concept of peer review. If all IFAs were to sign up to these simple rules then we might be able to do something radical that was to the advantage of the consumer of financial services. I do not hold my breath though.

Thank you for your confidence in the IFA sector though that is positive to hear. Sadly though too many still selling opaque products that the consumer cannot understand and which are more about advantage to the seller than the buyer.

Two true stories to ponder on. IFA firm of an Accountancy practice sells a HNW investor a £3m offshore bond invested in a structured product and pockets £47k in commission. Client reads the disclosure document on the same morning he gets a bill for £6k from the practice for accountancy services! he was I understand a bit miffed.

Whistle blower tells of an IFA firm who are transferring people out of the public sector scheme into SIPPs taking 7% “fee” and then investing the SIPP monies into UCIS and taking a further 3%. We were also told the fee payments are going to an offshore company to avoid UK income tax.

Now if the regulator concentrated on this stuff none of us would have a complaint about them

Thank you for your feedback

In answer to your final questions “no I don’t fancy a job at the FCA, they would make me wear a tie for straters!!” Seriously though I don’t disagree with your comments I do not see any advantage to a reguator in adopting my “simple rules” because it would reduce their scale by 2/3rds

I can however see significant investor advantage

I’m not an adviser but I know many in the industry and I have a great deal of respect for all of them.

It’s about time ‘you’ (I mean the advice industry) were more focused and organised and protected yourselves. For example, it would be amazing if all the influential firms (big and small) signed up to these rules and showed the regulator that you are prepared to self-regulate to some degree.

And the reality about consumers is that they don’t have the skills or the inclination to understand regulators. But they will listen to their IFA.

Paul

I couldn’t agree more! But then that would imply a simplified common sense approach which, whilst laudable, won’t happen.

Sorry to sound negative, but history suggests that a non-accountable regulator (particularly a new one) will try to justify it’s existence (and salaries) by retaining complexity rather than creating something that consumers will actually understand.

Good luck though, and you can count on my vote! Don’t fancy a job at the FCA, do you?

Gareth

Thank you for your response. Almost no effort is involved!! Seriously, it is quite natural to think that social media as part of a marketing mix offers little in the the way of control. In fact this is not the case. Social media can be “targeted” in the same way as any marketing campaign. We are often asked if the enquiries we receive are “suitable” and the answer is a resounding yes.

For example one of our advisory offerings is “investment advice” (no surprises there then!) and as an example this morning we have received an enquiry from a chap who has sold his business and needs investment advice in respect of the substantial sum he has.He found us via a web search, as many do, and we show up partly because of search engine optimisation but mainly because the message is right. So like any marketing activity it is about sending out the right message. Every single enquiry that comes through our use of the internet and social media comes from precisely the kind of client we want to work with.

The other thing to note is the very low cost involved. Apart from the time invested in writng the blog (and this is no more than the time say in writing a letter) everything else is automated. The cost therefore of getting to many thousands of potential clients is minute. Compare this with a direct mailing approach where the targeted list has to be purchased, a fulfilment pack issued and the costs associated with that.

The other significant advantage is frequency of message. Daily multiple blogs cost little whereas a conventional marketing programme might cost thousands

And probably the most important thing to note is that Social Media is complimentary and supplementary to other elements of the marketing mix. So for us it is about the link with PR and Press activity, Professional Introducers, Referrals from existing clients and advocates and the “local” marketing that we do.

Today people are seeking out their potential service providers on-line. It is as natural to do this as it used to be to look up Yellow Pages in the old days! It seems to me that an IFA might well want to take advantage of consumer behaviour

@David I agree (and just about every IFA I know would agree as well) transparency is key. Knowing what you are paying and knowing what you get means you can work out value for money, or not

@Nick also agree it is about the individual IFA/firm setting and operating their own structure responsibly

@Phil I think they “lord it over others” because commission has become synonomous with opaqueness (unfair really but there you go) Watch out though for the VAT thing. It is not as clear cut at the present time to suggest that VAT does not apply to commission because the HMRC could view it that way if intermediation was not the dominant service. Good news though is that advice may well be VAT exemppt under possible new rules

@Francis I noted your comments in the Steve Billingham newsletter this morning. As previous posters suggested perhaps charges can be expressed differently for different services and that certainly is what we do.

Project charge in monetary terms for advice. Implementation charge using adviser charging expressed as a pecentage 0.5% to 2% in our case, and Review fees at 0.5% using adviser charging or direct payment by standing order, so we pretty much use all methods apart from an hourly rate and we even have one of those for those who ask specifically for it!!

Once again great comments and thank you for them