21st October 2010

IFA letter of the week

I found the article 'It takes two to tango' on the FOS particularly useful. Luckily I have not, so far, had any complaints myself which have gone to the FOS, but everyone who has given advice at some time can consider it a distinct possibility these days as folks have become more litigious. Personally, I think this is far more of a threat to our industry than RDR. Whilst the lack of grandfathering is completely at odds with what happens in other professions when there is a change to basic qualifications, I think we all need to move from "A" level standard to something further up the scale. Even with level 4 we haven't reached degree standard.

However, I think the danger of the public not getting advice has much more to do with overheads than a large reduction in numbers of advisers. A lot of those who will not go on to qualify are in their late 50s and early 60s and might not have gone on for much longer anyway.

The problem is much more to do with what I have to charge my clients to help them. We now have a minimum of £500 or so for a first report and £750 for report and implementation. And this is quite low from what I can gather. This is really what drives clients into the arms of the banks. The reason why I cannot work for less than this is because of the overheads - PI, FSA etc levies and also the paperwork required for regulation. The clients are paying for this regulation because of the charges that are put onto the IFA community for failed businesses, eg Keydata. Having said that, I would run a tightly compliant business anyway because it's good for my clients.

This is really what we should be talking about!!

Alison Radford
Arch Financial Planning - IFA

Regulation