‘Out-of-touch’ regulation
We just had our reminder about non-completion of Covid-19/Brexit ‘survey’ and the threat of £1,000 fine from the Financial Conduct Authority.
It asks us questions such as: “What effect do you think Covid/Brexit will have?”
Given that the current government has no idea of what is going to happen, what possible benefit is there to answering questions and surveys using these tactics?
We appear to have a regulator who will not address the crooks and continues to let unregulated products flourish within self-invested personal pensions, with the answer being to simply increase fees for the good in the industry.
While some IFAs must take some of the blame for this, increases of 31 per cent in professional indemnity and 53 per cent in Financial Ombudsman Service levies are simply unsustainable.
Finally, we have to produce suitability reports which, according to the FCA, need to be focused and brief. Oh, and an ombudsman who is completely out of touch.
Name and address supplied
The decumulation phase
In reference to your article ‘Warning sounded as 42 per cent of pensions raided at “unsustainable” levels’ (Sep 30). What most financial advice misses is that retirees’ need for pension income declines in line with desire to spend money as people get older.
I am purposely ignoring the cost of care because the majority of people who have to pay for it themselves intensely dislike it and often do not spend their money, and struggle on to ensure they preserve their kids’ inheritance.
Another aspect that is often overlooked is that working should be viewed as the accumulation phase of life, and retirement the decumulation phase. Of course, few know their life expectancy but decumulation must nevertheless be the goal.
Also, many current early retirees have a number of pension arrangements and choose to use individual pension pots as bridges and expect to pillage and dwindle before moving on to the next.
Future generations may not be so lucky, I accept, but in the statistics quoted in the article, how many raided pots fall into the 42 per cent through careful planning and not through poor management or advice?
So in summary, let common sense prevail, accept life’s twists and turns and hope to die having just spent one’s last few quid.
Steve Tiley
Former financial adviser
Bank closures
Regarding the TSB branch closures (‘TSB to axe 900 jobs as branches set for closure’, Oct 1). As part of the 6 per cent that will now not be within 20 minutes of a TSB branch, I along with many others locally were dismayed to see our very small branch is on the list of closures.
And further shocked to find Argyll will now, I think, only have one branch in Oban, at the north of Argyll.
As for partnership with the Post Office – most of the village ones have been closed and Lochgilphead itself has no Post Office at the moment.
The mobile van meant to cover has been off the road for the past two weeks.
It just leaves those who cannot use online banking and have no mode of transport with little option but to leave the bank. And at a time when we are trying not to travel around – does paying a cheque in count as an essential two hour round trip?
Lynne Milne
The cost of advice
Regarding your article ‘Clients “gobsmacked” at FSCS fee hike’ (Sep 30).
Good for Mr. Harvey, and respect to his clients who were ‘gobsmacked’ at the level of Financial Services Compensation Scheme fees. This is something all advisers should do.
There are still those in the advice community, at the regulator, in government and wider commentators who bleat about ‘the advice gap’. Sure, the less well-off are excluded. Financial advice is an expensive business. If you do not have the price of the ticket, you can’t go to the match.
If there is genuine concern about those who are excluded from the process, then it is within the ambit of the politicians and the regulator to do something about it.
The continuing refusal to contemplate a product levy is just illogical and obdurate. The costs are born by the advised anyway in the form of higher charges.
Harry Katz
HA7 Consulting
‘Strange’ appointments
Regarding the appointment of Adrian Grace as chairman of 7IM (‘7IM appoints ex-Aegon boss Adrian Grace as chairman’, Sep 18).
What a strange decision by 7IM; in all the time Mr Grace was at Aegon its service standards for IFAs deteriorated rapidly.
Peter Stone
Compensation rates
I have been reflecting as to what would have produced the best financial outcome for lower risk consumers over the past 20 years. The surprising answer is to have received bad advice – a successful claim would yield an eye-watering 8 per cent a year compound guaranteed return.
The compensation interest rate has remained the same for several years and can considerably inflate the claim value. It dates back to before the financial crisis when base rates were around 6 per cent and looks increasingly difficult to justify in a world where base rates are 0.1 per cent.
A very simple way to help reduce the cost of levies, while still producing a fair consumer outcome, would be for this rate to be 2 per cent over base, which would be in line with where it was originally.
Name and address supplied
