News & Opinions
OPINION: FSA to clean up financial services
The Financial Services Authority (FSA) has recently published its most recent proposals for cleaning up financial services. For a while now, we have been following the FSA's Retail Distribution Review (RDR), what it means to us and what it means to our clients. The new proposals will come into force from 1st January 2013.
We've read the detail and here is a useful summary of the three main points, taken directly from the FSA website:-
"The key proposals of the RDR are:
Provide greater clarity for consumers through distinguishing between 'independent advice' and 'restricted advice' (non-independent advice) services; and ensuring that firms describing their advice as independent consider all products and providers that could meet a customer's needs (so consider all relevant options), free from any restrictions or bias, when making recommendations.
Raise professional standards - through requiring all investment advisers to be qualified to a new, higher level, introducing a code of ethics for advisers and enhancing standards for continuing professional development. These new standards will be maintained and enforced through the creation of a Professional Standards Board, which will be implemented by making greater use of FSA's existing powers in the Financial Services and Markets Act (2000).
Tackle the potential for adviser remuneration (commission) to bias advice - by requiring advisers to set their own charges in agreement with their clients ('adviser charging') before they identify suitable products for the customer; preventing product providers from offering pre-determined levels of commission and advisers recommending products which automatically pay them commission; and allowing the cost of advice to be taken from the product"
At Yates & Co, we welcome the FSA's ideas in this area. Hopefully, the new principles will provide greater clarity for consumers about who they are dealing with, drive higher professional standards and create better transparency about costs of advice and products. We've been providing our services in line with these ‘new' ideas for several years.
Rest assured that we will always strive to be at the forefront of the financial planning profession for the benefit of our clients.
Please contact me if you have any questions or comments about this opinion
Simon Yates
simon@yatesandcoifa.co.uk
17th April 2010