“Of course putting the client first is what we believe"
Friday, 6 November 2009
...as long as it does not affect our profitability!
I am smiling, wryly, at how the product providers, namely the banks in particular, are trying to promote an image of trust with your money. Putting clients first is the new message. Of course the message is great...It makes sense to do so after the debacles to date, but leopards do not change their spots that quickly (take UBS for example). You have guessed, it’s marketing and one must question the substance.
Most investors are not interested in the Retail Distribution Review that aims to shake up the financial services industry. The Regulators would like the banks to use words appropriate to describe their services. However, the banks do not want to be seen in the true light of day…they like words such as “advice”, certainly they do not want to be regarded as “salespeople”.
To illustrate my point… “Baroness to banks: You're lucky to be able to use word 'advice'. That is the verdict of Baroness Sheila Noakes, the Conservative Party Treasury spokesperson, addressing British Bankers' Association (BBA) retail policy director Peter Tyler at a meeting of the All Party Parliamentary Group at the House of Commons 27 October 2009.
“Tied and multi-tied advisers should consider themselves “very lucky” they may be able to use the term ‘advice’ when explaining their offering to consumers.”
It has be amusing as these institutions clearly would hate being called “salespeople”, yet whatever they call themselves, the balance sheets and profit and loss statements at the yearend simply focus of how much money they make from their customers. Salespeople, yes, advisers, no!
Perhaps one day it will be different, their muses towards transparency and being client focused may materialize, but today, its marketing.
It doesn’t stop there. It’s not just the banks.
Referrals to portfolio firms escape adviser charging rules
Advisers referring clients to a fund manager for portfolio management can take a cut of the management fee without disclosing the earnings to clients under adviser-charging, says Apcims.
In its response to the FSA’s retail distribution review plans, the Association of Private Client Managers and Stockbrokers says that the adviser-charging proposals do not apply to non-retail investment product business.
So what does that mean? For example a firm of stockbrokers may target IFAs to use their investment management services, and pay the advisers under the table so to speak, in an effort to circumvent the abolition of commission payments from 2012.
Where is the transparency? Where is the honesty?
Rather than embracing change which is unequivocally to the benefit of consumers, feet remain planted in the past to ensure they (the product providers, stockbrokers etc) are not disadvantaged!
The simple answer for investors, vote with your feet.
posted by Murray Round Wealth Management @ 09:48,
The Authors
Nicholas Round
Nic is the Managing Director of Murray Round Wealth Management Limited, who seeks to ensure the advice provided is truly independent. Based in Shropshire with clients local, national and worldwide, Nic has strived to find the best possible service for his clients needs, by researching and studying the market, trends and philosophies. Nic strongly believes Asset Class Management will bring his clients Financial Freedom, Independence and Happiness.
Kirsty
Kirsty is our communication guru. Managing information requires considerable due diligence and her passion for organisation gives the clarity we all seek. From Shropshire, with a Psychology Degree and much travelling, she is now back in Shrewsbury...and London often, keeping us all at Murray Round focused.
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