Aifa urges FSA to separate the barbers from the surgeons - 3 November 2008

 

 

 

WITH AN AIFA FRIEND LIKE THIS WHO NEEDS AN FSA ENEMY?

 

I'm sorrry Chris you are wrong on a number of points:

 

Q: Aifa’s new report, The Future of Retail Financial Services, calls for an advice profession with higher qualifications and standards, access to the whole of the market and remuneration models agreed between the adviser and the client.

 

A: Cut the industry down by two thirds - this should resolve the savings crisis at a stroke!  IFA complaints are 4%. However if we look beyond that we can see that excluding endowments the actual figure is 1.4%. Independent Financial Advisers (IFA's) generate 80%* of distribution but are only responsible for 1.4% of complaints! It comes a little surprise to read that, now the FSA-orchestrated hindsight review of mortgage related endowments is finally fading into history, we are seeing a dramatic increase in the proportion of complaints against banks and other large financial services organisations. What this tells us is that the business transacted by IFAs represents the lowest risk to consumer interests. 

 

Q: Aifa director general Chris Cummings says: “At some point surgeons stopped being barbers and become a recognised profession. The advice community has shaken off its old-ties but keeps being tarnished because of the behaviour of others who have appropriated the advice word, who wish to be cloaked in professional language, but who won't accept the higher standards. These are barbers not surgeons and the consumer must be protected from them.”

 

A: The industry has been "tarnished" by retrospective regulatory reviews and bankrupted by regulatory failures. If surgeons were paid via fees rather than by the NHS there would be a lot of dead patients and many more bankrupt! Public sewers have done more for public health than have the medical profession. If you want to use the surgeon analogy then perhaps you should be talking about a NHS funded advice system to pay for it all!  There are currently 6,000 outstanding complaints and regulatory investigations against solicitors. Each year about 200 lawyers are found guilty of breaching the solicitors' rules and sentenced by the Law Society's Solicitors' Disciplinary Tribunal (SDT). You are wrong if you think higher qualifications will resolve complaints.

 

Q: Cummings says: “It should be made clear here that we see advice and sales as being options that consumers can select between; that they can and should be supportive and increasingly leverage better consumer outcomes. We must recognise consumer-buying behaviour that exists in all other markets, where people vary between seeking advice and opting to make transactions.

 

A: Well what does that mean: "increasingly leverage consumer outcomes!" Chris you should have written the RDR it was equally unintelligible!

 

Regards

 

SIMON MANSELL

 

[Simon Mansell] -----Original Message-----
From: IFADUglegroups.com [mailto:IFADoglegroups.com]On Behalf Of Evan
Sent: 03 November 2008 13:52
To: IFADUoglegroups.com
Subject: [IFADU] Aifa urges FSA to separate the barbers from the surgeons - 3 November 2008

Aifa urges FSA to separate the "barbers" from the "surgeons"

Nicole Blackmore | 03-Nov-2008

The Association of Independent Financial Advisers has urged the FSA to use its retail distribution review to help consumers re-engage with savings and support the development of a distinct advisory profession.

Aifa’s new report, The Future of Retail Financial Services, calls for an advice profession with higher qualifications and standards, access to the whole of the market and remuneration models agreed between the adviser and the client.

The trade body says only those who meet the requirements should be termed as offering financial advice.

Aifa director general Chris Cummings says: “At some point surgeons stopped being barbers and become a recognised profession. The advice community has shaken off its old-ties but keeps being tarnished because of the behaviour of others who have appropriated the advice word, who wish to be cloaked in professional language, but who won't accept the higher standards. These are barbers not surgeons and the consumer must be protected from them.”

The report also proposes that Money Guidance will act as an introduction to the retail financial services market and a sales channel will service those who do not want their financial circumstances considered by an adviser.

Cummings says: “It should be made clear here that we see advice and sales as being options that consumers can select between; that they can and should be supportive and increasingly leverage better consumer outcomes. We must recognise consumer buying behaviour that exists in all other markets, where people vary between seeking advice and opting to make transactions.

“Also, in some sectors of the industry, there is a ‘myth of scarcity’ but we believe that our focus should be on attracting and re-engaging those who have turned their backs on the sector, and the RDR is the tool to achieve this goal.”

Source: Money Marketing

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