Adviser numbers fell 12% in RDR build-up

The number of retail investment advisers working in the UK plummeted almost 12 per cent in the build-up to the RDR deadline, FSA research reveals.

According to the regulator, there were 35,899 retail investment advisers in Summer 2012 – a fall of 11.5 per cent on the previous year. IFAs were the largest group, representing 58 per cent of all RIAs, followed by advisers in banks or building societies at 19 per cent.”http://www.moneymarketing.co.uk/regulation/fsa-adviser-numbers-fell-12-in-rdr-build-up/1066056.article

Some 89 per cent of the 1,436 advisers surveyed said they are definitely or likely to remain an RIA, while 6 per cent are planning to leave the industry.

The remaining 5 per cent will either retire as planned, have not yet decided what they will do or are unsure of their prospects.

The FSA says it will publish a full report detailing the findings of the survey shortly.

This follows separate research published by the FSA in November which suggested around 12 per cent of IFAs are likely to switch to offering restricted advice post-RDR.

This means that there are a lot more people looking for Financial Advice with a lot less of advisers there to give them advice, it is my opinion that the FSA have alienated a lot of consumers from getting the basic advice they need as the majority of Financial Advisers will want a fee for the less well off clients.

I am happy to do a full financial review free of charge on the first consultation, so please feel free to contact me.

The FSA needs to find a better way to oversee advisers

So, here we are safely in the RDR era. But how does the landscape look? Is the terrain as widely different as predicted by a few media naysayers?

I think not as I believe the financial advisory world is now a better place to be in and its reputation with the public will continue to improve. covering professional standards, charging, description of services and independence and restricted offerings. This will be done in three cycles beginning later this month. It will publish its findings after each cycle.

If advisory firms are not on track after the third cycle, action will be taken thereby filling the regulators purse and forcing RDR improvements to be undertaken by the firm.

All findings will be used to form a post-implementation review of the RDR. To me, this exercise sounds like a great deal of time intensive work to be undertaken by the Financial Services Authority.

Where will the time come from as it morphs itself into the Financial Conduct Authority, costing millions of pounds to change the name of the regulator across literature, business cards, advertisements and other expensively produced items?

My last IFA inspection visit took three bright young people employed by the then regulator more than three days to inspect my IFA business. We were a small firm with two RIs. Thankfully we were found to be satisfactory. This is one reason why I now help firms with regulatory issues.

It takes millions of pounds to thoroughly inspect advisory firms. Would it not be better for clients to feed back on their experience with financial advisers on a website similar to Trip Advisor from which the FSA can then follow up? For after all, some of the most experienced financial advisers, especially IFAs receive only circa 1 per cent of all FOS complaints. The FSA may be wasting its time inspecting many quality firms or will need to ‘nick pick’ to justify the huge cost of visiting firms.

The independent versus restricted debate continues but at last the banks have disclosed their charging structures.

HSBC is charging £950 upfront for those with assets of less than £75,000 which will cover the majority of the investing public. As HSBC is offering a restricted product range people may better be served seeing an IFA who will offer a more personal service, whole of market advice and will charge a similar upfront fee with the first meeting free. It is so much more conducive to receive financial advice at your work place, home, or in a social environment than making an appointment at a bank branch which can result in waiting in a banking hall full of people.

The bank advice could then be geared towards product sales as HSBC pay a bonus to high performing financial advisers.

Description of service is fairly straightforward with most of the information already on websites which will be checked out by clients before making an appointment. This is where clever market positioning is needed by those who offer the services to ensure the benefits of tax, inheritance and trust planning is understood.

The nirvana of being financially secure and debt free in both in sickness and health is, and always will be, about financial planning – not product sales. I wish the RDR was more about focused on highlighting the benefits of financial planning.

http://www.moneymarketing.co.uk/adviser-news/kim-north-the-fsa-needs-to-find-a-better-way-to-oversee-advisers/1064226.article

Money Advice Service healthcheck set for overhaul

The Money Advice Service has admitted its £2m online healthcheck tool “needs improvement” and has revealed plans for an overhaul.

In March, Money Marketing revealed MAS research showed of 1,000 healthcheck users, 300 did not remember doing it and an additional 371 failed to do anything differently.

MAS is currently the subject of a Treasury sub-committee inquiry. In June, MoneySavingExpert.com founder Martin Lewis branded its tools “crap” and “embarrassing”.

In a letter to Treasury sub-committee chair and Labour MP George Mudie, published today, MAS chairman Gerard Lemos highlights Money Marketing’s coverage and adds: “It is clear that overall the results of research done so far have pointed to the need for us to improve the health check.

“Building on this consumer insight, we will build a ‘mark II’ healthcheck which we expect to be far more impactful.”

A MAS spokesman refuses to disclose how much the redesign will cost, but insists it has already been factored into the 2012/13 budget.

Clayden Associates director Daniel Clayden says: “It is concerning as there was a large amount of money spent so the healthcheck tool should have been thoroughly tested. Hopefully it will learn from its mistakes.”

In the letter, Lemos reminded Mudie that the MAS began withdrawing previous remuneration arrangements for new staff on January 1. Existing staff began transferring to the new arrangements on June 1 but will be compensated for any lost income unless they leave or move position within the organisation. All directors are in the process of moving.

http://www.moneymarketing.co.uk/regulation/money-advice-service-healthcheck-set-for-overhaul/1057736.article

The new arrangements will be based around MAS’ reward strategy, developed in 2011, focusing on delivery of its objectives, the ability to recuit high calibre staff and affordability and value for money. It includes the withdrawal of flexible benefits package and non-contributory pension scheme.

Lemos says management recognised that staff transferred from the FSA were on unsuitable and unsustainable wages for a smaller, “more commercially-orientated” organisation.

This week MAS launched a six-week marketing campaign across television, in print and online with the tagline, “What does Ma think?”.

G7 to hold emergency eurozone talks

TORONTO/BERLIN – Finance chiefs of the Group of Seven leading industrialised powers will hold emergency talks on the eurozone debt crisis on Tuesday in a sign of heightened global alarm about strains in the 17-nation European currency area.   With Greece, Ireland and Portugal all under international bailout programmes, financial markets are anxious about the risks from a seething Spanish banking crisis and a June 17 Greek election that may lead to Athens leaving the eurozone. High quality global journalism requires investment.

“Markets remain sceptical that the measures taken thus far are sufficient to secure the recovery in Europe and remove the risk that the crisis will deepen. So we obviously believe that more steps need to be taken,” White House press secretary Jay Carney told reporters.   Canadian finance minister Jim Flaherty said ministers and central bankers of the US, Canada, Japan, Britain, Germany, France and Italy would hold a special conference call, raising pressure on the Europeans to act.   “The real concern right now is Europe of course – the weakness in some of the banks in Europe, the fact they’re undercapitalised, the fact the other European countries in the eurozone have not taken sufficient action yet to address those issues of undercapitalisation of banks and building an adequate firewall,” Mr Flaherty told reporters.   The disclosure of the normally confidential teleconference came as EU paymaster Germany said it was up to Spain, the latest eurozone country in the markets’ line of fire, to decide if it needed financial assistance, after media reports that Berlin was pressing Madrid to request aid.   Angela Merkel, German Chancellor, and leaders of her centre-right coalition said in a statement: “All the instruments are available to guarantee the safety of banks in the eurozone.”   They effectively ruled out Spanish calls to allow eurozone rescue funds to lend money directly to recapitalise Spanish banks, which are weighed down with bad property debts, without the government having to take a bailout programme.   Berlin is pressing reluctant eurozone partners, including close ally France, to agree to give up more fiscal sovereignty as part of a closer European fiscal union.

source ” http://www.ft.com/cms/s/0/d3a243cc-aed3-11e1-a8a7-00144feabdc0.html#ixzz1wu7bH6um

Inflation increases to 3.5% in March

Inflation in the UK increased to 3.5% during March, as upward pressures on inflation came from food, clothing and the recreation and culture sectors. The CPI (consumer price index) rate increased from 3.4% in February , while the RPI (retail price index) rate shrank to 3.6% from 3.7% in February.

Prices in the food and non-alcoholic beverages sector fell by 0.5% between February and March, a lower rate than recorded during the prior year period, while increased fruit, meat and bread and cereals prices impacted the sector. In the clothing and footwear sector overall prices rose by 2.2% between February and March, while a slower rate of decline in the recreation and culture sector also helped push inflation upwards.

The biggest downward pressures on inflation came from the housing and household services sector where prices fell by 0.2% overall and the transport sector.

 

source “http://www.fundweb.co.uk/1049808.article?cmpid=14002&email=true ”

 

Markets regain majority of losses despite Italy concerns

European markets have recovered most of their early losses despite concerns that Italy may be the latest country to fall victim to the eurozone crisis.

At close, the FTSE 100 stood at 5510.82, a fall of 0.3 per cent from its opening price, while the French Cac 40 and the German Dax were both down 0.6 per cent.

Markets across Europe fell by around 2 per cent in early trades as concerns were raised over political uncertianty in Italy. The yield on Italian 10-year bonds rose from 6.37 per cent to a high of 6.64 per cent, before falling back slightly. Prime Minister Silvio Berlusconi is set to face a vote on public finance tomorrow.

Meanwhile, Greek prime minister George Papandreou has stepped down to make way for a unity government of all political parties, despite winning a vote of confidence late last week. A new prime minister will be named to head the coalition government, with fresh elections forecast for early next year.

source http://www.moneymarketing.co.uk/investments/markets-regain-majority-of-losses-despite-italy-concerns/1041028.article

Building societies get mortgage indemnity cover

Genworth Financial is to provide mortgage indemnity insurance for the building society collective Mutual One.

The partnership between the two organisations will mean that building society members of Mutual One can use the mortgage indemnity insurance provided by Genworth Financial to maintain a presence in the higher loan to value and first-time buyer market.

Building society members of Mutual One include Hanley Economic Building Society and Skipton Building Society.

Mutual One chief operating officer Andrew Gold says: “We believe the MII collective relationship will help societies continue to meet their core purpose of providing a wide choice of residential mortgages including those for borrowers who need higher LTV mortgages.”

Genworth Financial mortgage insurance senior vice president of UK commercial business Tammy Richardson says: “It’s a long held principle of Genworth that mortgage insurance enables lenders to widen access to home ownership for consumers through the bad times as well as the good.

“We advocate prudent lending as a means to returning to stability in the housing market, and believe this new facility with Mutual One will help both the building societies involved, and their customers.”

Building Societies Association chairman and Hanley Economic chief executive David Webster says: “The Hanley wants to continue to lend to the first-time buyers within our local community at 90 per cent LTV. The new Genworth and Mutual One mortgage insurance collective will provide The Hanley with a cost effective approach to mortgage insurance. We look forward to a long term successful relationship with Genworth and Mutual One.”

Genworth Financial were among several industry figures called together by housing minister Grant Shapps last week to discuss how to help first-time buyers access the housing market.

Other attendees included Council of Mortgage Lenders director general Michael Coogan, BSA head of mortgage policy Paul Broadhead, and FSA manager of credit risk Duncan Mackinnon.

Welcome to George Gibson Financial Adviser

My name is George Gibson. I have been giving client’s Financial Advice since 1997 and from March 2002 I have been a Financial Adviser (FA) based in Dunfermline, Fife, although I have many clients based all over the United Kingdom.

Amongst the products and services I offer are Investments, Pensions, Life Insurance, IHT planning, General Insurance & Mortgage Advice.

I offer all my clients the opportunity to get the advice and cover they need by phone, on-line or a personal visit either at your home, place of business, or in my office.

My primary aim is to provide every one of my clients, whether personal or corporate the highest standards of advice and service. I take great care in discussing their specific requirements to ensure that I match my clients to the best possible solution.

Regards George Gibson

The pension age change

The pension age change – ignore it and you could lose out

The minimum retirement age increases from 50 to 55 on 6 April 2010, and I recognise that you will be directly affected by this change.At the moment it’s possible to use your pension to provide a tax-free lump sum and/or an income at any time after you reach the current minimum retirement age of 50. You don’t even need to stop working to do this.

However, if you are over 50, or will be by 5 April 2010 – and you do not access your pension benefits by 6 April 2010 – you will not be able to take out any money from your pension fund until you are 55, up to five years away.

This simple fact could have significant consequences for you, in particular if you needed funds for a specific purpose before your 55th birthday; for example to help a child going off to university, finally taking that dream holiday, or paying off the mortgage.

The good news is that you still have options that let you retain this financial flexibility.

In these tough economic times we understand that you will be looking to keep as many of your options open as possible. You may be concerned about the security of future employment, or are simply seeking alternative income sources (due to the rapidly decreasing interest rates available), but this change in legislation could potentially get in the way of those plans.

You could choose to buy an annuity, a financial product that would provide you with a regular income for life in exchange for a lump sum payment.  If you buy an annuity before the end of this tax year you can avoid being affected by the increase in retirement age. But if you aren’t ready to swap your pension fund for a guaranteed income just yet, there is a more flexible alternative.

An income drawdown plan allows you to take an income from all, or part, of your pension fund while leaving the remaining funds invested. On top of this you can take up to a quarter of the money as a tax-free lump sum. The income can be increased or decreased, within set limits, to suit your requirements. It allows you to retain the right to draw an income from your pension before your 55th birthday without having to commit to an annuity just yet.

If you think you might need a tax-free lump sum or an income from your pension fund before your 55th birthday, taking action now to pre-empt the increasing minimum retirement age could be the solution. However, it is vital that you also consider the impact this will have on your income later in retirement when the possibility of earning is no longer an option.