There is a lot of hostility around the idea that restricted advice is somehow the poorer cousin of independent.
Every time I write about the subject I get a barrage of emails and tweets from restricted advisers telling me it is time to move on from this debate and instead talk about client outcomes.
But here is a poser: if the two are the same, why are so many restricted companies so reluctant to just say what they are?
Many restricted companies pretended they were not, using the words ‘independent’, ‘financial adviser’ and ‘independently tied’I have just been involved in a month-long exercise to figure out the fees, charges and services of the biggest advice companies in the country.
What should have been relatively straightforward, looking at a few websites, turned into a mammoth task cutting through obfuscation and – at times – downright misleading information.
Through it all, many restricted companies pretended they were not, using the words ‘independent’, ‘financial adviser’ and ‘independently tied’ in ways that steered as far round the term ‘restricted’ as possible.
Even when challenged, companies seemed to weave round the issue. For example, one bank said its investment management service was “restricted”, but clarified this was purely in the sense it could only provide advice on investment management, as opposed to other areas.
The bank said that as part of building bespoke portfolios, its experts could give “unbiased advice” on a wide range of providers, but under Financial Conduct Authority rules it was classed as restricted.
What a muddle
It really should not be so difficult to cut through all this.
Some companies say the reason for the lack of transparency is because they advise only on high-net-worth customers, and their advice needs to be so bespoke it was impossible to compare prices.
But that assumes the wealthy do not care about cost – which I cannot believe for a second – and that they have the time to go through hours of assessments before choosing the right adviser – which, also, I do not believe.
Without knowing what service you are going to get, and with poor information on cost, there is no way of establishing whether you are getting value.
And it is much more than that, because the regulators and ministers (when we get new ones) are watching.
Britain has a chronic advice gap, we all know that. There is willingness to solve it.
If those in positions of power believe advice companies are being wilfully obscure – and I think some are – then the only answer will be greater regulation. No-one wants that.
Pension tax overhaul
The Conservatives have tried to apply a sticking plaster to the emergency that has become the NHS pensions crisis.
They have effectively kicked the bedpan down the street a few more years, promising that consultants will have any pensions reduction made up for in later years by the Treasury.
So taxpayers are now underwriting the mistakes of a previous chancellor. What a ludicrous state of affairs.
Hospital consultants were the unintended victims of the government’s attempts to limit tax relief for higher earners.
But the high wages and even more generous contributions in the NHS scheme meant consultants were caught out by the pension taper for annual allowances.
This whole fiasco rather neatly sums up the mess that we have got ourselves in over pension allowances.
They have been whittled back so far, become so complicated and, as far as I can see, been implemented with such little assessment of the impact, that they now need to be undone.
Quite how the Conservatives will meet their long-term ambition of a solution to the NHS pensions crisis, I do not know.
Change the NHS scheme by essentially making it less generous and doctors will revolt; change the tax rules so that public sector schemes are judged differently to the private sector, and you create another minefield.
And scrap the taper and it all just becomes another Tory tax giveaway for the rich. What we really need is a fundamental overhaul of pension taxation – but no chancellor has the stomach for that fight.
Isa trouble ahead
And so we wave goodbye to the Help to Buy Isa.
Although it was another tool to keep the housing market chugging along, it was generous and well-liked.
That cannot be said of its replacement, the Lifetime Isa. It is riddled with small print and clauses to catch out the unwary. I fancy problems lie ahead.
James Coney is money editor of The Times and The Sunday Times
@jimconey
