There was an intriguing choice of viewing last night on TV and I do not mean between some mad bat in a jungle or an ill-timed expose of FIFA that surprises no-one! The real choice was actually between what looked like about 11 MP’s “debating” the future of the Retail Distribution Review, (RDR), and 11 men playing some of the greatest football many of us have ever seen.
For those that followed both, there was only really one choice as all the scintillating stuff and excitement came from the men in Barcelona shirts in El Classico, showing what can be achieved by team work, a great youth training scheme and a top class manager.
The MP’s on the other hand, with at least one I spotted seemingly dozing, only produced brief moments of excitement in a session that was less of a debate and more of a series of speeches, almost a cross-party “love-in”, against the general proposals.
Top of the list of complaints were the fact that commission being effectively abolished leads to fears that Financial Advice would become the entitlement of the rich and that Advisors who have been successfully advising their clients for decades without any issues are suddenly not deemed competent enough.
Conservative MP Mark Garnier estimated that around 3 million clients would lose access to their IFA from the date of inception, (1st Jan 2013), based on estimates of a 30% drop in advisers. “How can it be that reducing competition results in better outcomes for consumers,” Garnier said.
This is just a part of the series of regulatory debates which are raging around the Financial Services Industry at the moment, with the Mortgage Market Review, (MMR), also causing almost as much friction as the Barca/Madrid brawl sparked by a nasty tackle on Messi.
Even Grant Shapps, the Housing Minister, has waded into this one recently stating, “I think it was at the point when I realised that I wouldn’t have been able to get a mortgage if the MMR changes went through that I thought this might be a step too far. There’s no point closing the door after the horse has bolted”.
The issue with all these things is not so much whether or not you believe the proposals in both cases are right or wrong, there will always be those who agree and disagree, but whether the whole debate has actually been conducted in the right manner, listening carefully to those on the ground and actually acting in the best interests of the most important people of all, the consumers.
Or is it simply a case of regulators trying to make up for lost time and being seen to be doing something. As Mr Shapps says, “What we need is top level central regulation and not pernickity down in the dirt regulation and what you can and can’t do as a mortgage company.”
For me it is somewhere in the middle. We need more clarity in our industry, who is actually independent and who is restricted in their advice so the public are in no doubt. A common level of expertise across both independent brokers and bank branch staff. A fair choice for consumers on how they wish to pay for their advice, whether by way of a fee or via commission so no-one is excluded from getting the advice they need.
In fact why not go one stage further, a level of commission which is standard across the industry, both in terms of procuration fees and insurance commission? Set at a fair level that remunerates the adviser and means there can be no question of bias between providers. No increased commissions for any reason.
These debates have a while to go yet and what actually sees the light of day remains to be seen. The FSA needs to spend even more time with the likes of AMI and the CML to understand the real issues.
So whilst it may be remiss of me and whilst I will follow the debates and contribute where I can, as we all should, for now at least please forgive me if I choose the football porn option!