January 2008

Treating advisers fairly

Dear Editor,

You can't move in financial circles at the moment without someone (seemingly on auto pilot) quoting strange acronyms at you, MIFID, RDR or TCF. As a relative outsider (I am not an IFA), I can't help feeling sorry for them. On further investigation it would appear that the strategies behind the initials didn't involve them, change is being made for the sake of it or the implications of the changes, reflect what they have been doing all the time anyway.

Let's isolate Treating Customers Fairly (TCF). To be perfectly honest, I've met very few IFAs that don't treat their customers fairly; but now that the FSA has invented the phrase it would appear that years of old fashioned business practice and courtesy may have counted for nothing.

At the recent Symponia conference, our first speaker looked at TCF in light of the elderly (Symponia's dedicated market), he said, "... certain groups are likely to be put under the spotlight due to their areas of specialisation, including equity release and care fees planning because many of their clients are elderly and/or ill and vulnerable. These subject areas can be dangerous in the wrong hands and alongside sub-prime lending, equity release and care fees planning will receive greater attention than other areas because there is greater room for error".

This suggests that the FSA has realised that only qualified advisers should deal with care fees planning and equity release, yes in part; equity release, by its nature is easier to label, if you are over 60 and releasing money from your property you need to find a suitably qualified adviser. Surely the same logic should apply to care fees planning?

Don't you believe it, the wrongly named LTC qualification only applies to one product area, meaning that any adviser can interact and advise clients in care homes - so long as they don't recommend the obvious nominated product.

I know that Symponia members will go back to their practices and continue to demonstrate their understanding and commitment to good business practice. What about the FSA: I guess it will continue in its own sweet way, totally convinced that it invented good adviser service, but blissfully unaware that care fees planning is being handled by non qualified advisers.

Jeremy Davies
Managing Director
Symponia