-----Original Message-----
From: The IFA Defence Union
Sent: 20 May 2005 09:33
To: adminretailfs.co.uk
Subject: FT are doing an article on depolarisation - input from IFAs
required
Hi Evan
Rebecca Knight is a Personal Finance Reporter at the Financial Times,
she is covering depolarisation '6 months on' and asked me for input after I
questioned the sanity of Dan Waters at the FSA back in February. The same Dan
Waters who was on the front page of FT Adviser in the story about FOUR firms
signing up for 'basic advice'..
They are not of this planet are they? This Government passes down madcap
policy to the FSA for implementation and the industry foots the bill for the
wasted time and effort, look at 'consumer' education, look at Sandler products
etc.
So, what are your thoughts on depolarisation?
Rebecca seemed to think banks would be compelled to offer more choice
despite recent reports showing some big names are not interested. What makes
people think the FSA are trying to impose the regime on the industry and might
even succeeed in doing so?
Why would an IFA become 'multitied' or even set up another company that
is multitied, is it commission?
An IFA can offer whole of market choice for the Open Market Option, the multities
I have seen to date involve just ONE annuity provider such as the Pru, what is
the point of that? Why would an IFA throw away the ability to offer the BEST
annuity on the market?
An IFA can offer ALL life policies including Whole Of Life and convertible
term assurance, the multities announced thus far have one company for the
protection policies, what happens when the adviser sells term assurance when
WOL might be more appropriate. more to the point WHO is ultimately responsible
for the compliance when five companies are tied to same person? This was the
problem in Australia, the companies eventually walked away from multities and
went for 'wraps'.
What are accountants and solicitors going to do with their referrals
when the IFA is extinct? How can they justify referrals to multitied agents?
Why don't the FSA depolarise by saying EVERYONE should offer Whole Of
Market and become one of David Severn's 'WOMBLIES'? We all know why, the banks
have always failed to provide quality advice because they are not professional
advisers and because targets rule their very existence, look at that case where
a couple earning £5,000 pa were given £100,000 in loans over a 12 month period!
Your thoughts on a postcard please...
You can email her directly at Rebecca.Knight@FT.com but please copy me
in so I can put it on the web, if you want to be famous that is!
Evan
evan.owenifadu.co.uk
p.s. For the record, I don't believe for one moment that IFAs will go
the way of the Dodo... But I do believe the FSA as we know it will not last
much longer.
-----Original Message-----
From: Alan Lakey
Sent: 20 May 2005 12:46
To: rebecca.knightft.com
Cc: evan.owenifadu.co.uk
Subject: Depolarisation
Highclere
Financial Services
42 London Road, Apsley,
Hemel Hempstead,
Herts. HP3 9SB
e-mail: alan.lakeytconnect.com
Fax: 01442 233631
Tel: 01442 234800
Money Management Equity Release Planner of the Year 2004
Dear Angela
I understand you are writing re the advantages, iniquities of
de-polarisation.
As a practicing IFA since January 1986 it has always been a self-evident
truth that only whole of market advice can possibly offer the cheapest, best,
most flexible, fastest growing or whatever other requirement the client has.
I have no basic objection to the existence of tied agents – in fact,
their very existence makes life easier for me in confirming value for money to
clients. The existence of multi-ties is a different matter. This purposely
muddies the waters and allows the multi-tier to pronounce that they have
selected the best items on the market in the interest of their clients. This is
codswallop – the choice of company is usually down to the maximum commission
uplift available and also assistance with funding expansion plans. None of this
is in the interests of the client.
I have been approached by St James Place whose clever approach involves
promises of practice buy-outs allowing a snug retirement, multi-ties with the
‘best’ companies and groovy junkets in Thailand. At no point in the discussions
were my clients mentioned!
I cannot possibly see how any regulator worth its name (let’s not forget
that they supposedly have the interests of the consumer as a priority) can
sanction such confusion with the obvious end result that the bancassurers and
multi-tied national brokers grow fat at the expense of offering whole of market
advice.
No doubt weasel words will be used to explain how we all benefit but, so
what, Robert Maxwell spoke reasonably as well.
Yours sincerely
Alan Lakey
PARTNER
Authorised and regulated by the Financial Services Authority
A R Lakey B A
Davison
-----Original Message-----
From: Tony Menghini
Sent: 20 May 2005 11:58
To: 'The IFA Defence Union'
Cc: Rebecca.KnightFT.com
Subject: RE: FT are doing an article on depolarisation - input from IFAs
required
Importance: High
Evan
My thoughts entirely. The mandarins up in FSA towers are not living in
the real world! We are updating our disclosure documents, agreements/IDD's and
really believe that clients will not be bothered to shop around as the thought
of facing another interview will deter most of the public. Also the public is
against paying fees generally. Witness the problems accountants have trying to
get money out of their clients for work done. Many have huge cash flow
problems.
Keep up the good work.
Regards
Tony Menghini
Senior Partner
MI Financial Services LLP (MIFS)
is authorised and regulated by the Financial Services Authority. Company
Reg.No OC302145. Registered office as below.
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you on life assurance, pension and investments from different companies.
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-----Original Message-----
From: Dave King
Sent: 20 May 2005 11:44
To: rebecca.knightft.co
Cc: The IFA Defence Union
Subject: depolarisation
Dear Rebecca,
I’ve been given your name as a potential polarisation peculiarities
pursuer, so here goes, and forgive me if you’ve heard this one already…….
My firm , A.S.K. has 3 partners.Let’s imagine that partner A ties to 4
companies for life and protection business. Partner S ties to 4 companies for
pension and investment business and partner K ties himself to the bed- no
sorry, remains an I.F.A. (maybe by setting up 3 different companies?)
First consultation is free with partner K, who discovers the best in the
market for the client for one of the recommended products happens to be on the
multi tie panel of partner A- so tells the client that partner A (or new
company A) will actually deal with him.
If the best in the market for other products isn’t on any of the multi
tied panels then he deals with it himself.- Whether by retaining commission or
charging a fee.
Why do this?- Because the FSA/Govt has decided that multi ties are a
good thing to have available!?- No, because if there is a method of extracting
the most commission
available from a certain situation, then why should the single tie/multi
tie banks be the only ones allowed to do so?
Thankfully, most of my business comes from referrals and existing
clients, but when I come across those clients who have had “advice” from an
estate agent or a bank, then invariably this advice has been wrong, since the
“adviser” in question has a target to meet or is out the door. This “advice”
usually consists of wrongly sold mortgage payment protection insurance ( MPPI
-when income protection would be better)- but the “adviser” doesn’t have that
option in his limited product range and is on a better bonus if MPPI is
sold. It also usually includes loan
protection as a lump sum added to the loan- when a £5000 loan suddenly becomes
£7000 – and just you try and claim on it!
There’s probably also a useless ISA invested in a fund utterly unknown
to the client.- But they’ll all be in a nice coloured folder bearing the banks
internationally known logo and the client felt all nice and warm, until either
he tried to claim, or tried to cash something in ,or worst of all years later
had a heart attack because his Isa is
worth zilch. –Aha- does he have a letter from the bank/estate agent stating
that although he was advised to effect Critical Illness cover he declined. Is
there a copy of this letter signed by the client and on his file? If not, he
can sue, because the nanny state says so! –
Dare I try and change some of
these plans- I have to give blood to the compliance people for it! However,
when it happens to an ex client of mine when I know it’s wrong advice being
given, I am powerless.
This is the laughable, litigious, ludicrous, position we face- because
the FSA/Govt think that clients should have “more choice”.
What they will get is less choice since the providers of policies will
only be able to pay large commissions to the large multi tie “agents” left on
the playing field when we, the IFA, have been killed off. And don’t give me the
rubbish that the man/woman in the street will pay for advice such as above.
That I’m afraid, is reserved for the upper class, middle England , higher rate
tax investor- who the FSA base all their figures on.
Last rant coming up then I’m off home to bed with the flu, and if I
crash the car into a bank on the way, I’d like the money in used 10’s please.
Do Banks/building societies/estate agents ever conduct an initial
interview going through Terms of business, initial disclosure and dare I
mention Menu?
That’s 2 signatures before you start. Fact find- another signature,
Mortgage fact find- another. MPPI declinature-another. Authorisation to obtain details
on existing plan(s)- another 2/3 signatures. Apparently I would be led to
believe that a bank would spend time doing this! I don’t think so- but do you
know how they get away with it?
One sentence in a letter somewhere which simply states- this advice is
on a limited basis. If we, the small
IFA tried to use that defence 2/3 years down the line, we’d be crucified- but
the bank/estate agent would just swallow the £200,000 fine. This is called business logistics, when it’s
cheaper to pay the fine than to rectify the problem. Why should they hazard
millions of pounds of income stream, just so that clients are given the correct
information, or advice?
If I should die think only this of me…. There is some corner of a
foreign field that is forever independent………….Freedom, as William Wallace says.
Dave King A.S.K. Independent
Consultants LLP 568 Clarkston
Road Glasgow G44 3RT
-----Original Message-----
From: AMPM365
Sent: 20 May 2005 11:16
To: enquiriesifadu.co.uk
Subject: Re: FT are doing an article on depolarisation - input from IFAs
required
Evan ...........
I will leave it to you to decide whether you copy Angela Knight into
this e-mail.
Polarisation again raises the link with the OFT - where the key to
Equitable, endowment and pension shortfalls lies. It is also why Adair Turner is already screwing up the future for
pensions.
Polarisation first passed the OFT scrutiny and then subsequently failed
the OFT scrutiny at a later stage.
I don't think Angela wants her article to dig that deep - she is I would
guess looking for a lighter angle.
- but she will know the OFT
recently completed their review of the FSMA (in part using consultants -
Oxera).
If she wants to know what both the OFT and Oxera missed - again - she
can contact me.
It goes to the heart of the matter - with polarisation as only one item
on the agenda.
Mike ....
-----Original Message-----
From: Steve Pett
Sent: 20 May 2005 13:44
To: Rebecca.Knigh.com
Subject: Depolarisation
Hi Rebecca
Evan Owen thought you might be interesting in my views on
depolarisation.
Anyone who wishes to operate as a multi tied agent is EITHER:
1) Interested ONLY in gaining the highest commission levels, never mind
the clients interests or the quality of the products OR
2) They are tied agents who wish to be able to HOODWINK the public into
thinking they are as good as IFAs.
There is absolutely NO WAY a multi tie can be an honourable alternative
to being an IFA. They might pick the 10
best companies today, but that 10 will be different in 1 year, very different
in 5 years and probably have only one company left offering top rate products
at the end of 10 years. But the multi
tied agent MUST go on flogging the rubbish, or they will lose all the income
they have built up with any company they chose to ditch, and face massive
financial penalties.
The FSA inherited a sensible regime where you are either tied to one
company, or independent. I have no
problem with allowing white-labelled gap-filling as this will encourage the
establishment of new product providers, to replace those wiped out by over
regulation, but multi ties are nothing more less than a fraud perpetrated on
the public by people who continue to have no comprehension of the enormous
damage they are doing to UK Financial Services at home and to its reputation
(and hence earning power) abroad.
It is well know within the industry that those in charge of it are
either congenitally insane, or they are civil servants with no understanding of
a once proud industry (which has already lost over 75% of its advisers) or they
actually do want to wipe out the industry for some strange reason.
Perhaps you can tell us, because every adviser I talk to is very
confused as to why the FSA want IFAs to refuse advice to all but the very rich
(and I don't mean common or garden millionaires). I used to love helping ordinary people, but came to the
conclusion I could not do this and earn enough
for my family to live on.
Advisers are leaving the
industry in droves, just when MORE advice is needed, and those who are
left are ditching ordinary clients because the cost of the red tape exceed the
income they can generate by a very wide margin.
Hope that helps!!
Steve Pett
Editor
www.IFAbonus.co.uk 0845 129 8858
Gave up the struggle as an IFA in November last year, and still
grieving!
-----Original Message-----
From: Ned Naylor
Sent: 20 May 2005 12:39
To: Rebecca.Knigh.com
Cc: Evan Owen
Subject: Depolarisation
Dear Rebecca
From the point of view of customer choice, best advice, best execution
and product research the only feasible method of delivering financial products
to the consumer, which "do exactly what it says on the tin"
is the Independent channel
All the FSA has done with this exercise is complicate matters for joe
public, who in the main trust banks and building societies even though the
majority of the recent so called mis selling and other financial scandals seem
to eminate from that sector.
It should be illegal to offer financial advice on anything other than a
whole of market selection process.
It is quite clear as well, that if this did happen, the number of
financial products on the market which fail to stack up to their exaggerated
claims, would reduce to those proven and reliable products and companies that
have stood the test of time, without having to be oversold by over zealous
commission hungry salespersons whose only interest in the client is how much
they can make and how quickly it could be done.
The requirements for such an august body as the FSA would by that very
act, be reduced by over 80% in my estimate and the costs similarly downgraded,
giving a more efficient financial market place over all.
This would not stifle innovation, it would simply put the onus back on
the financial providers to provide.
Simple really?
What do you think ?
Regards
ned
Northwest Region Client Services
- The Office @ Fairhaven, 9 Ollerton Street, Adlington, Chorley, PR6
9LF. Phone / Fax 01257 483 640.
Ned Naylor & Co is a trading style of A P Financial Services UK Ltd
who are Independent Financial Advisers
authorised and regulated by the Financial Services Authority AP Financial
Services UK Ltd head office is at 3 John St, Llanelli, Carmarthenshire, SA15
1UN. Company reg 4527173 FSA Reg 218973