An Arch-Enemy?

2012: Avengers Assemble - Whedon

Financial Planners are furious today after the FSA announced that it has conducted a review of the sale of Arch Cru products. It would appear that many of the advisers selling these products were inept with an overwhelming number from the sample failing the file test from the FSA. The FSA suggest that many of the firms involved (795 in all) will collapse, conservatively putting this at 30% of the firms concerned. Planners are not upset that the firms found "wanting" will be punished, but that we (the rest) have to pay for their incompetence to the tune of around £100m. The FSA suggest we should all increase our fees so that we can meet the rather larger FSCS "30 days to pay invoices" that will be on the way. This of course makes perfect sense doesn't it? higher fees for clients of good firms, paying for the "advice" that others gave and took on a commission basis. One of the regulators main initiatives TCF (Treating Customers Fairly) seems to have rather caught a cold on this one, failing on several counts - its not fair, and its not our "customers" and if ever one client cross subsidised another this is perhaps the most telling example.

I am happy to report that we have not arranged any of these products. I believe that a fee system rather than a commission system where the adviser is only paid to sell products, is the main reason for this sorry state of affairs. Advisers are meant to ensure that clients have been given proper information and of course that it is appropriate to the client (not the adviser's bank account). I dare say that this would probably have been a non-issue had firms been made to charge fees years ago - which is something that we have always done, yet are being penalised by being forward thinking, by having to pay compensation for those that seriously messed up. Unlike comic characters, I don't have an arch-enemy, though one has to wonder how long good financial planners and their clients will put up with this sort of stuff before they get together to form a group seeking to clean up the place, rather like the current Avengers film on release at the moment.