The Association of IFAs (AIFA) has accused the FSA of giving greater weight in the Retail Distribution Review's proposals to bancassurers and product providers.
Chris Cummings, director general of AIFA, and Fay Goddard, deputy director general, said the regulator appears to have been “selective” in its proposals, adding “certainly some of the larger players had the loudest voices”.
This was despite confirming they were happy with the make-up of the RDR discussion groups, who formulated the proposals in the review.
The fears were raised during an online chat organised by AIFA with financial advisers, who spent 45 minutes asking Cummings and Goddard their views on a range of issues.
The first question posted for the duo asked: “The FSA [has] trumpeted the RDR proposals as coming from the industry.
“Bearing in mind that this is a ‘distribution review’, and that IFAs are responsible for around 60% of product distribution, were the various consultation groups appointed by the FSA made up of at least 60% IFAs?
“The proposals seem so skewed towards banks that I find it hard to believe they were put forward by IFAs."
Cummings and Goddard replied: “The five groups all had IFA representation plus an AIFA attendee. Each sector had the same number of representatives. A lot more was discussed [than] what appeared in the FSA paper.
“[The] FSA appears to have been selective in its proposals. Certainly some of the larger players had the loudest voices.”
The FSA maintains the discussion groups were fairly represented and reiterate that the RDR is a discussion paper intended for feedback.
Amanda Bowe, head of the RDR at the FSA, also told IFAonline last month there was a misconception the FSA was trying to enforce the RDR’s proposals on the industry.
The make-up of the discussion groups for the RDR appear to have been evenly balanced. The Professionalism and Reputation group, typical in constitution to the four others, consisted of three professional bodies (IFP, CII, and the IFS), four providers (HSBC, Canada Life, Edward Jones, Rathbones), two IFAs (Thinc Group, Tenet Group), and one FSA representative.
Other issues raised during AIFA’s interactive chat included possible examination requirements should a two-tier advice market evolve from the RDR.
Cummings and Goddard added AIFA is “looking at whether there should be a vocational element to any higher requirements, such as the ISO standard for financial planning”.
Another adviser asked: “The current proposal is for PFP to be called ‘independent’. Currently it is the business known as an IFA firm.
“If a business has a mix of PFP-qualified advisers and non PFP-qualified advisers, what will the firm call itself and surely this will be very confusing for the general public.”
Cummings and Goddard replied: “Totally agree. The guiding principle behind the RDR must be to improve consumer confidence in financial services. Proposals such as this will add confusion.”
If you would like to comment on this story, contact:
020 7034 2636
What made financial headlines over the weekend?
Pensions neglect to be criminal offence
All-day event on 24 April
Consequences could be more severe than in stress tests
AFH has six segregated mandate funds