The FSA validates fees for advice

The key proposals of the FSA Retail Distribution Review were well trailed – here as elsewhere. The main one is a gamble: forcing IFAs into a professional business model will also push it even further into the high end of consumer income and assets, leaving an even bigger mass-market gap below it to be filled [...]

Valuing fees: coffee with a twist

Our observation in Anticipating the Retail Distribution Review that the business model for financial advice will not change unless and until customers learn the value of paying fees for a professional and independent service was echoed in an article in the Observer yesterday by Heather Connon

Anticipating the Retail Distribution Review

The Discussion Paper resulting from the FSA review of the failed business model for long-term savings in the UK will be presented by the FSA at a conference on 27th June. No Monkey Business Limited circulated this briefing to financial journalists, anticipating what it will say. Our advice: don’t expect any silver bullet – all [...]

Anticipating the Retail Distribution Review

Click here to download a pdf version of this paper.
Insights from a firm that knows about alternative (consumer-friendly) business models
Key points

The background to the RDR is economic. There is a ‘market failure’ in the distribution of long-term savings products (FSA, Treasury, HOC Treasury Committee, Myners, Sandler). Three aspects: i) the business model for firms involved [...]

What you need to find out about charges when selecting an IFA

In “Advisers face questions over who pulls the strings” (FT Money, 5th May), Elaine Moore reports that it is now very difficult for consumers to select an IFA based on how they charge. Correct. ‘Fee-only’ superficially holds out the best hope of avoiding bias, but it wastes an adviser’s ability to game the commission system for the benefit if their client. It is also often a sign that the firm is predominantly a financial planner and cannot or should not be managing investment portfolios.