The back and forth between industry and the authorities continued this week on various issues that have rarely been far from our pages recently.
Even with the bank holiday robbing us of a day’s reporting, there was still more than enough going on to squeeze into our round-up of things you need to know:
1. Guidance service should be manned by advisers.
Giving credence to a suggestion made many times by advisers over the last 12 months, the Financial Services Consumer Panel told the Work and Pensions Select Committee’s inquiry on pension freedoms that the government’s Pension Wise guidance service should be manned by pension professionals.
They pointed out the standard of advice may be compromised by the fact while the telephone service, delivered by The Pensions Advisory Service, requires its counsellors to have a minimum of five years relevant experience, face-to-face sessions are organised by Citizens’ Advice, which requires no prior experience, expertise or relevant qualifications.
The FSCP stated: “We believe that the level of service required by consumers in this area can only be delivered by confident, competent, experienced professionals who do not have to rely on a script.
“They need to be as qualified and experienced as regulated financial advisers.”
Hate to say we told you so...
2. Compensation scheme says something sensible.
Another issue which never seems far from adviser conversations is that of the Financial Services Compensation Scheme’s levy, the burden of which appears to fall unfairly on many firms which keep steadfastly on the right side of the regulatory line.
On Tuesday, the compensation scheme’s chief executive backed calls for the calculation to be risk-weighed, ahead of the Financial Conduct Authority’s funding review this autumn, which is set to look at this topic.
“I think one of the complaints that I hear most frequently is from businesses that say ‘we have a very low risk business model and we end up paying the bills for much higher risk businesses’, I think that is a legitimate issue which the funding review should address,” said Mark Neale.
“That is something that I think we should look very carefully at,” he added.
Less talk, more action wanted, would appear to be the reaction.
3. Compromises may be the way to a long-stop solution.
Another long-running saga broke some new ground this week, as the Association of Professional Financial Advisers’ director general admitted that the best way of securing a liability ‘long-stop’ for IFAs would be to opt for an insurance-backed solution.
While there is clear support among Apfa members for a straight 15-year cap on customer come-backs, the Financial Conduct Authority is more likely to lean towards a centralised insurance fund, as was suggested earlier this summer.
Chris Hannant, director general of Apfa, said: “Nothing has been said definitively, because the FCA have their clearance processes to go through, but they have emphasised the statutory requirements to protect consumers and how that [a long-stop] squares with potentially limiting consumer protection. That is the challenge they have.”