On the coldest night of the year and with London at a standstill, MPs spent three hours debating (or agreeing) on the RDR. Missed the debate? See our minute by minute blog...
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22.07 Well there you have it. A much more impassioned 'debate' than I would have predicted but very one-sided. The reasons why the RDR is being implemented only mentioned briefly at the end and this could stir up anti-RDR feeling once more.
MPs across the House clearly very concerned about some of the proposals especially the qualification requirements and lack of grandfathering. They also warned about restrictions to advice in rural areas and how the changes are playing into the banks' hands. There was also a lot of anger about the lack of consultation by the FSA with MPs on this subject and they feel the regulator is being far too heavy-handed. There was no vote and Hoban effectively ruled out calls for a rethink of any parts of the RDR. A wasted three hours? Only time will tell if the FSA sits up and takes notice. Let me know your views tonight or tomorrow: [email protected]
22.02 Mark Garnier calls for FSA to listen to the House's concerns.
21.50 Mark Hoban now. He once again flags the responsibilities of Parliament and the FSA. Parliament sets up the framework for the FSA. He says there has been a long consultation process. It is right the FSA is responsible for day to day regulation. He says he spoke to Hector Sants this morning and he is well aware of the concerns about the RDR. The regulator has to make difficult decisions on behalf of MPs and their constituents. Hoban won't give way to questions!
Hoban wants on record the value he places on IFAs and he values his own IFA!
He says consumers must be assured advice is underpinned by good technical knowledge.
He recognises the debate around grandfathering but asks how much experience is sufficient and covers enough products to give whole of market advice?
There has been a relaxation so there will be non exam-based alternative assessments. "High standards of technical knowledge will help advisers navigate clients through the complex choices they have to make."
Hoban says he doesn't doubt the integrity of the vast majority of advisers but again refers to example of past pensions mis-selling as a warning. Adviser charging is needed to build consumer trust, he says.
The cost of the financial healthcheck will be born by the social responsibility levy and the biggest firms will make the biggest contribution.
This evening's debate has helped the FSA understand the issues, according to Hoban.
21.46 Some form of bias will always be there whether commission or fees, one MP says. Call to regulate from the provider end-say an end to 10% commissions. Not sure what products they have been selling???
21.38 Well, as many advisers have noted tonight this is not a debate as it is very one-sided. There are surely issues with the advice sector that the RDR is trying to address? We need some balance here. Worrying too that this is a very passionate debate and lots of concerns but this is too little, too late isn't it? IFAs have already spent thousands preparing for RDR.
Comment: Paul Gorman: IFAs create wealth, IFAs protect voters ..... says Mr Offord, well said!
21.35: Matthew Offord, Cons Hendon. Remuneration and qualifications main areas. "When business conditions have never been more difficult, advisers have been forced to spend many hours earning points when they could be earning money to feed their families." He says the FSA has gone too far. Message FSA should be giving out is protection is valuable, go and see an adviser and get some.
Comment: Alistair Cunningham. The consistent theme in this RDR debate is that it isn't a debate. The anti-RDR lectures would be a better name
21.29 Pauline Latham, Conservative Mid Derbyshire. We must continue to help and promote small businesses. Again she calls for only new entrants to meet the qualification requirements. The increased role of banks post-RDR is "worrying" according to Latham. Not clear there will be any benefits to the consumer.
21.28 Call for FSA to be held accountable like other "quangos".
21.24 George Hollingbery, Conservative Meon Valley There are other ways advisers could be grandfathered. Advisers could continue to advise clients already on their books with written consent. If no complaints, they could pay to have a written examination of their books to check no issues. Interesting points here.
21.19 Geoffrey Clifton-Brown, Conservative Cotswold and a chartered surveyor. Again worries about RDR exits. "I say to Mr Sants who are you to put 5,000 businesses out of business with the stroke of your pen?" In what other profession do you have to retrain at this level. Timetable for exams too quick. New entrants should sit exams but grandfathering for older advisers. Division between IFAs and 'restricted' advisers "unacceptable". Poor at a disadvantage if commission banned. Can't remember a debate in 16 years of Parliament when so many MPs have attended across the parties. Good point Parliament wants to help small businesses but the RDR goes against this.
21.13 Nia Griffith, Labour Llanelli. Raising problems with availability of exam slots and problems for older advisers when sitting exams. "The nature of the exams needs to be re-examined," she says. Question: Can these exams show if people will mis-sell? Criticism exams no bearing on their everyday jobs in the real world. A common complaint amongst IFAs.
21.10 Tessa Munt, Lib Dem MP for Wells, says RDR will fail as it is being imposed on the advisory community. FSA should take its lead from what consumers want, she says. The regulator would argue it has done a huge amount of consumer research. Again wants talks reopened on RDR-firms have already started transitioning though.
21.06 Sixteen more MPS to speak! Need more coffee.
20.57 Go advisers-you have been lobbying your MPs. Jim Shannon, DUP, Strangford, again referring to people with small pots. Jim says he is being watched by his constituents on Parliament to check he is representing them well. You can do it Jim. Again concerns raised about lack of access for rural clients and burden on older advisers to meet the requirements. "If advisers fall by a third as predicted this will leave millions of consumers without advice." Commission route means you don't have the worry of laying out cash everytime you want advice, Shannon says.
20.56 No idea what Guto talking about now! I quite like him though.
Comment from Nick Bamford: I have heard no evidence to support the contention RDR should be postponed.
Comment from: Keith Churchouse. "I have to say this is the best TV I have seen in months. Who shall we vote out first..." Fair point Keith. Hoban surely?
20.52 Guto Bebb. Conservative, Aberconway. Is this his real name? Again concerns raised about "regulatory burden" on small, rural advisers. Flags up loss of postal services and legal services in small, market towns. People shouldn't be forced to drive to a city to find an IFA or use banks.
20.42 Tom Blenkinsop, Labour Middlesborough South and East Cleveland. Worries about threat to Kensington Friendly Society in his constituency following the RDR as they will have to take more qualifications even to give more basic advice on funeral plans. Bit of a PR job for the Kensington here! Good point about read-across to insurance products though.
20.37 Heather Wheeler, Conservative South Derbyshire and former insurance broker. She says don't blame IFAs for financial crisis and consumer complaints. Point made complaints against IFAs have gone down in recent years.Wheeler says FSA throwing baby out with the bathwater and the regulator has not explained why it is doing this? Another call for Hoban to reopen talks with the FSA. Comparison of RDR to Stalinist regime-you knew it was coming at some point.
20.26 Most MPs seem to want a delay to the RDR pending further investigation and cost benefit analysis. Surely we are too far down the line now though?
20.32 Concern raised about CPD for small businesses. Call for Hoban to get in touch with the real world. Timetable for RDR not achievable.
20.29 Michael McCann, Labour, East Kilbride. Agrees with RDR proposals for charging but concerns about qualifications. Debate not helped by Hoban's McDonald's comment!
20.25 Baldwin. Qualifications are the main area of concern. Compares advisers to nursing-imagine if nurses had to take degree level exams? "I don't see how the ability to pass an exam will preclude mis-selling in the future." Baldwin says she has been inundated with correspondence. Wants the regulator to be more "respectful" of experience. Understands there will be an alternative to exa-based assessment. We don't want "cliff-edge" disqualification of IFAs on January 1, 2013. she argues.
20.24 Wants more on the financial healthcheck from Hoban.
20.23 Baldwin says banks are likely to be "advantaged by the RDR". Calls for FSA to wait until PRIPs decided.
20.20 Harriett Baldwin: "First time FSA subject to this level of scrutiny". Is this debate just a stick to beat the FSA with?
20.19 Call for FSA to be put under real scrutiny by the House asking them to account for the RDR and reconsider it.
Comment from Philippa Gee: Give me strength! So far this debate is as far from a debate as is possible. Very disappointing.
20.16 It seems the house is very angry about the RDR and the power given to the FSA. Is a rethink really on the cards?
20.13 George Mundie, Labour Leeds East. "RDR under his radar" until an adviser wrote to him and he is now calling for an investigation. "It is very worrying these decisions have been made without recourse to this house or recourse to anyone." Says FSA has moved too far to show they are not a "soft-touch". Warning lots of letters when Mortgage Market Review comes into effect. Is it too little too late for MPs to get involved now?
20.10 Mark Garnier-The RDR appears a "combination of unfounded assertions and contradictory research". Will outcome be better than the current situation? Three million existing clients will lose access to their trusted advisers. Need to look again at grandfathering and commission ban.
20.08 "Unacceptable" that 3,000 advisers will lose their livelihoods. Does RDR really deal with the cowboys?
20.07 Chairman of Treasury Select Committee highlights large number of members at the debate.
20.05 Call to review the whole set-up of RDR. Message from IFAs they are "being ignored".
20.04 Costs of RDR now estimated at a "truly staggering" £1.7bn pounds greeted with groans by the house.
20.02 Now onto the lack of longstop-good stuff this! "Is it fair an IFA is chased to the grave in a manner no other profession allows?" The answer is 'no', Garnier says.
Good point by Martin Bamford: 20, 30 or 40 years of experience only 'trumps exams' if it is *relevant* experience
19.59 Garnier highlights surveys showing only 6% of people prepared to pay fees. Point about bank commissions-changes should be consistent across the whole sector. Inevitable many will not seek advice if forced to pay fees.
19.57 Debate on grandfathering hotting up. IFAs broadly in support of raising excellence without the 'dead hand of the FSA forcing them to do so" Garnier says. IFAs also tested on areas they are not specialising in. Says FSA determined to put IFAs out of business if they don't take the exams or their assessments. Worries about who will mentor the new IFAs.
19.55 Reference to Hoban's McDonald's comparison on qualifications greeted with 'shame'. Garnier stressing time taken to take extra exams. Question of grandfathering as 'experience needed at the moment'. No reason at all for not introducing grandfathering, Garnier says.
19.54 Question about impact on rural advisers with small businesses.
19.53 Garnier says we don't want to derail the FSA and are supportive of many of the measures. However, the "devil is in the detail". FSA has introduced measures which disproportionately affect advisers. He says 30% of advisers wouldn't support RDR.
19.51 One MP says advisers worried experience doesn't count for anything. Garnier says a huge number of advisers have raised this point.
19.38 Mark Garnier kicks this off. He starts by outlining the dire financial situation we are in. He describes IFAs as an "important group of professionals".
19.48: Motion not carried.
19.44 And you thought you had a hard day job!
19.41 Democracy in action!
19.38 Motion argues no action has been taken which would prevent another financial crisis and urges protection for UK taxpayers. Waiting for the result. Tense-well sort of.
19.35 This actually looks like fun! Hope our reporter Laura Miller is enjoying it down there.
19.31 Hoping there are going to be more people in the chamber for the RDR debate. It looks pretty empty at the moment. Bad weather and strikes probably haven't helped.
Underperformance still present – for now
Regtech or fintech
15% increase in number of claims paid
Open architecture philosophy
Inflation above 2% for first this this year