One topic generally guaranteed to start a Twitter thread that will run for a while is fees and advice charges, another is the Financial Conduct Authority and regulation, so with that unholy alliance, I am going to dive in.
It seems clear that our lord and master in Stratford (London, not Warwickshire) has value in its sights – more specifically, the value clients are receiving for their hard-earned pound invested in their pension or Isa.
No part of the food chain is going to be exempt from the regulator’s glare as it looks out, like the eye of Sauron, from FCA towers.
We already have fund managers and investment managers having to scrutinise their fees and costs on their offerings and decide if they are offering value for money.
So far it seems, in general, they think they are. Count me amazed.
Not many turkeys are voting for Christmas, or, more accurately, not many fund managers are ready to chop their profit margins and bonuses yet.
The FCA will be asking where the cost savings of running large funds, and from fund manager mergers, are going if it does not see them being passed onto customers.
Now the gaze seems to be falling on advisers.
The powers that be have been dropping hints made of lead for quite some time about contingent charging on defined benefit transfers and it is now proposing to review ongoing advice fees as well.
The FCA has always said it is not a price regulator; it will not tell us what, or how, we can charge clients, but it is clearly concerned that the competition in the market the Retail Distribution Review was supposed to bring has not happened and consumers do not shop around enough when seeking advice – or if they do, they find it hard to compare cost and service between companies.
It is concerned that there is clustering in advice charges. According to Lang Cat research last year this is true, with three pricing points standing out at 0.5 per cent, 0.75 per cent and 1 per cent.
I suspect it is not so much the price clients are paying as such, but also what they are receiving for that, that the FCA will look long and hard at.
Charging 1 per cent for an annual statement and market summary, as I have seen recently, delivered over a cup of tea and biscuit, is not going to cut it, even if it is Yorkshire Tea and a Duchy original shortbread.
Darren Cooke is a chartered financial planner at Red Circle Financial Planning