The smaller business practitioner panel chairman and Citywide Financial Partners director Clinton Askew revealed his own firm’s FSCS bill rose by 300 per cent this year and argued that while small firms were not yet being put out of business by the levy, many were struggling to cope.
Mr Tyrie responded that after having had FSCS chief executive Mark Neale in front of the panel last month, the view at the time was that the FSCS was insurance cover priced without reference to any underlying risk.
Mr Neale did not directly address these concerns with his latest industry blog, instead arguing that investors do not take more risk because they can fall back on the scheme, adding that consumers usually take advice in a bid to reduce risk, not increase it.
“We do not second guess advisers’ judgements,” he stated. “We do not protect people from ordinary investment risk where appropriate investments perform less well than expected.”
4. Which report raises hackles.
Research published at the start of the week by Which? criticised advisers for not providing a menu of charges on their websites.
Another quote of the week contender came via West Riding Personal Financial Solutions managing director Neil Liversidge’s response: “I just don’t like people telling me how to run my business... until such time as Which? is appointed regulator they can keep their nose out of my business.”
However, Kennedy Black Wealth Management director Ben Smaje, said an industry wide template for advisers would be a good idea. “I don’t publish my fees online, but it is something I have contemplated on a number of occasions; trying to break down the fee structure would be overly complicated and would put people off.”
Fee transparency was also tackled by consultancy North Highland UK, which called for advisers to display their fees in pounds and pence, arguing that clients are increasingly confused by percentage charges.
Joanna Hall, the firm’s vice president financial services, said: “For example, where £100,000 AUM commands an advisory fee of £1,000 per annum at a 1 per cent rate, a client with £500,000 AUM is charged five times the amount (£5,000) for the same service.
“As a result, advisers may be pushed to display fees differently in the future to maintain client satisfaction.”
5. Adviser-only regulator suggestion finds support.
On Monday, Libertatem director Garry Heath called for a new adviser-only regulator to be carved out of the Financial Conduct Authority as part of the Financial Advice Market Review.
While the firms that FTAdviser spoke to had not yet signed up for his new trade association, most came out in support of his idea of a dedicated industry watchdog.
Phil Marten, chartered financial planner for Octagon Consultancy, commented: “The same regulator looking after some of the largest companies in the world, and small one to five employee businesses, is just not working.”