Dear Wizard Learner

FSAs RDR interim report

Click here to test you knowledge on the FSA's interim report on the RDR.

The Wizard’s View
The old adage of not pleasing all of the people all of the time has never rung more true following industry reaction to the FSA’s interim report on the Retail Distribution Review. On the one hand, many IFAs and some industry professional bodies welcome the proposals (probably because it shows them in a very good light), whilst others such as tied and multi-tied sales forces are screaming from the rooftops faced with the very real possibility that their business models will be eradicated in a few months’ time. Some are even saying that millions of consumers face the probability of no access to financial advice if only independents remain. Of course there is nothing to stop firms from becoming whole of market if they so wish in order to retain their advisory capacity, but one can understand the criticism when an organisation is faced with the unexpected costs and logistics of such a step change.

Where there could be some confusion is on the next tier of sales – particularly those that are classed as “guided”. One could imagine clients often not being completely sure whether they are being guided towards a sale or advised. Indeed where does the line get drawn?

Money guidance can only be a good thing as a back-up service to the public. You could foresee it being used as part of the overall process involving guided sales although bearing in mind the service is unlikely to be regulated, care would need to be taken that it was very much information based and did not step into the precarious world of regulated advice.

I also agree with the concept of raising educational standards. Whilst I accept that qualifications alone do not make an adviser, if used to assist the individual’s development as well as meeting minimum standards, they can become a considerable aid to overall competence and confidence.

I am not sure about professional bodies taking over supervisory duties of advisers in this regulated world in any form proposed. For one, wouldn’t the FSA be accused of “passing the buck”? Secondly if the regulator is going to do that with advice and distribution where else will it implement the strategy? Thirdly, professional bodies are not held in the highest esteem by all those working in the industry. Many may loath the idea of being forced to join them (let alone be supervised by them) just to continue in their careers.

We will have to wait and see what changes will be made between now and the Autumn. Some of this looks good, some potentially fraught with problems. Any industry incentive to raise standards in principle is good, providing we don’t end up with more unnecessary casualties on the way!

The Wizard recommends
The Paraplanner, this is a new website which aims to serve as the first point of call for paraplanners searching for information and advice. We wish them success with this new venture and would request that all the advisers on Wizard Learning invite their Paraplanners to take a look, I am sure they will find it very useful. 

Martin Vaughan, senior paraplanner at Cooper Parry and co-founder of the site said "We felt there was a need for a single website that was the primary source of information, where most of the answers to most the questions they have in their daily working lives would be answered". You can find the site at www.theparaplanner.com

Kind regards

Wizard Learning
www.wizardlearning.com

Wizard Learning is run by Mike Goldsmith a Chartered Financial Planner in association with a team of highly qualified, industry experienced individuals in order to assist finance professionals pass industry exams and help meet their CPD requirements. We provide a wide variety of online learning solutions for recognised industry qualifications as well as online training on key skills.

Contact us if you have any comments or questions.

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