FSA rules and FSCS levies threaten to strangle advisers
IFAs are concerned about the strangling regulation of the FSA and FSCS levies that are likely to be imposed.
For the past seven days I have been holed up in a Scout hut in the middle of nowhere in the Lake District with 17 other deranged men and women. We all have a mission in mind – to achieve the near impossible and run 10 marathons in 10 days around the glorious shoreline of Windermere. Seven down and three to go.
It has been like going back to boarding school (I never went but I know enough men and women who did) as we have been thrown into bunk rooms and told to share with total strangers. Never has a man slept so close to me (apart from Terry Hepplewhite, a former director of Polhill Public Relations, after a rather excessive night on the town) in my life. I hear his every breath and snore.
Quite bizarrely and by total coincidence, my room-mate for the so-called Brathay 10 in 10 challenge is a leading independent financial adviser, Adrian Shandley, of Southport-based Premier Wealth Management. Like me, Adrian is a half-decent runner but he is slightly better at advising clients than pounding the roads that encircle Windermere.
Although I have known Adrian for more than 10 years, I have not really known him other than to say hello (we have met at more marathon start lines than had cups of coffee to chew over personal finance cud). But I now know him very well.
For a start, he cares passionately about his business and his profession. And you only need to have a quick root around his website to realise that Premier tries to live up to its name. Its mission in life is to provide clear, forward-focused investment advice and to “create, manage and tax-efficiently preserve clients’ wealth”. All I know is that clients of Premier travelled up to the Lake District to watch Adrian run, so he must be living up to his billing.
I also now know that he is concerned about the way the independent financial advice sector is being strangled by the forces that make up the Financial Services Authority. This strangulation, he says, is taking place on two fronts.
First, there is the forthcoming introduction of the retail distribution review, which Adrian feels is a sledgehammer to crack a nut. Although well intentioned, Adrian believes RDR will have severe consequences on the delivery of independent financial advice in this country, leaving a massive advice gap. It will join the other ‘gaps’ – protection ‘gap’, investment ‘gap’ – that plague the financial services industry.
Second, and probably more worryingly, Adrian is seriously concerned about the impact of levies from the Financial Services Compensation Scheme on the health of the independent financial advice sector.
Having been hit by one special FSCS contribution payment demand as a result of the Keydata bonds fiasco (£14,500 with more to follow), he now faces another one as a result of the fallout from the horrible Arch Cru investment funds debacle. This is on top of the normal five-figure annual FSCS payment that Premier pays on the nail – and also on top of FSA fees and professional indemnity premiums.