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Backstage with Keith Richards

31st May 2016

 

Many of you would have read about recent comments made by the Bank of England's chief economist Andy Haldane, who wrongly suggested that financial advisers had "no clue" about recent changes to pension regulation.

https://www.moneymarketing.co.uk/advisers-slam-boe-economists-irresponsible-comments/

At a time when the profession continues to make great progress, such a broad and sweeping statement from a senior figure within the BoE undermines efforts to restore public confidence and trust in the profession. Even if only intended to emphasis the complexity of the market, the comments are offensive to advisers and equally flies in the face of the government's decision to mandate professional advice within pension reforms.

Mr Haldane's comments demonstrate a lack of fact-based insight, knowledge of the market and consideration of public best interests, and so I have written to the BoE for an explanation of the grounds for and timing of the misinformed remarks.

A recent survey conducted for the Personal Finance Society revealed that the trust and confidence of consumers who use financial advice has increased by 40% since 2013. In 2013, 43% of advised consumers said they trusted the financial advice sector, jumping to 60% earlier this year.

The profession has made great progress in starting the journey of restoring public confidence and trust, but Mr Haldane's comments, which were front page news, clearly demonstrate the additional challenges. At a time when consumers need access to professional advice more than ever before, it remains one of the Society's core objectives to raise awareness of the importance and value of professional advice.

By opening communication channels, I hope to gain a better understanding of any concerns the BoE might have, and work together to improve public education and awareness of the importance of pension and retirement planning.

From the boardroom

On Wednesday 25th May, the Board of the Personal Finance Society held one of its final meetings before the appointment of two new member-nominated directors.

The potential impact of FAMR's 28 recommendations was a major focus of our strategy discussions ahead of consultation meetings I'll be participating in with the FCA and Treasury.

Earlier last week, the nominations committee kicked off a series of interviews for the two member-nominated director positions being vacated by outgoing directors David Ingram and David Thomas who have both served the maximum term of office.

The final interview stage concludes on Thursday and I look forward to announcing the successful candidates at the AGM on 14th September.

I want to thank both Davids for the contributions they've made to the Personal Finance Society, including the introduction of their respective Presidential themes of 'Pro-bono' and 'good practice', during an exciting and successful period of evolution of the Society.

FSCS consultation kicks off

As previewed in the last edition of My PFS, the FCA hosted the first FAMR consultation meeting on Friday 27th May to discuss its review of the FSCS funding system. I had earlier met with the FCA and FSCS for pre-consultation discussions but Friday's meeting was the first as part of a formal consultation phase.

In attendance was a broad cross-representation of the sector with active debate on the various alternatives being considered, although a widely supported product levy was confirmed to be out of scope of the review as it would require legislative change.

The review will however be comprehensive in its broader considerations and include the fairness of current classes, scale of impact on firms as well as the impact on the scheme from sectors that don't currently contribute, or don't contribute enough.

Risk based or smoothing mechanism approaches were highlighted as two potential solutions to consider as part of the FAMR recommendations, especially as the latter would address the unwelcome impact of unpredictable additional levies throughout the year.

The fact that FSCS funding reform is the first consultation to be launched, demonstrates how seriously the FCA/HMT have taken industry feedback and implemented this key review as one of the first of 28 FAMR consultations.

We would encourage members to actively and professionally contribute constructive views and ideas as the consultation phase continues. The profession has a key role to play in helping to shape a fairer FSCS funding system and everyone has an opportunity to input to the consultation, either directly or via their respective organisation or representative body.

We welcome member views and ideas - please direct any constructive feedback to: membership@thepfs.org

Recognising excellence

Finally, as part of this year's revamped annual awards programme, the Personal Finance Society has opened entries to an extended list of practitioner prizes.

We recognise there are members right across the country who dedicate themselves to developing a superior level of expertise in specialist areas of advice and we wanted to formally pay tribute by including a range of new accolades at this year's newly named Personal Finance Awards.

Excellence in retirement and later life advice, investment advice and mortgage and protection advice will be recognised with new awards, adding to the chartered financial planning firm, paraplanner and flagship chartered financial planner of the year categories.

To see the full list of categories and to enter, please visit www.thepfs.org/pfsawards. Entries close 12th August. Good luck!

Best wishes,

Keith

 

About the Blog

In this blog Personal Finance Society CEO Keith Richards will be keeping you up-to-date with all the Personal Finance Society news, projects and initiatives that we have in the works.

Read past editions of the blog »