John Millican, Managing Director and Financial Adviser
Posted in Financial Advice on 24.09.11

There was a time when we all trusted the Banks, or rather our local, friendly Bank Manager.  That all ended when the banks became retailers, target driven and profit motivated. In January the Financial Services Authority announced they  had fined Barclays a record £7.7m and instructed them to pay up to £59m in compensation  for failing to provide adequate advice to more than 12,000 of their customers.  This was the largest fine imposed for a case involving retail investors and the sixth largest in the regulator’s history.  Nick Cann, Chief Executive of the Institute of Financial Planning commented “the fine is a damning indictment of this advice and the process followed by the organisation and advisers.” In case Barclays feel aggrieved at this extra publicity, in the same month RBS/NatWest were fined £2.8m for mishandling complaints.  This followed an earlier fine in August 2010 of £5.6m for inadequate systems and controls.

It is depressing for firms such as ours, who act professionally, that it is so easy for the high street banks to cynically engage in sales activity dressed up  as financial planning advice.  The achievements of sales targets and executive bonuses is clearly placed well ahead of the welfare of the customers. However, an overhaul of how financial advice is given, known as the Retail Distribution Review or “RDR” for short, comes into effect at the beginning of 2013 and this has meant the banks’ costs are likely to rise at exactly the same time as they will have to be more explicit about how much that advice is costing their customers.  As a result  Barclays have recently announced that they will be withdrawing from the retail financial advice sector.  The move will make it the first high street bank to stop offering consumers financial advice ahead of the Financial Services Authority’s ban on commissions from 2013.

RDR is specifically designed to improve people’s understanding of, as well as increase their confidence in, the financial services sector.  Most significantly, the Review is intended to increase the level of professionalism and as a result the minimum qualifications required to give advice are being increased and the way in which clients pay for that advice is being altered to ensure complete transparency.

This will affect all financial advisers to an extent, however, at Fiducia much of the groundwork has already been done. Our continuous professional development means the majority of advisers are already qualified beyond the new minimum requirements and all are on track to achieve the required qualifications by 2013.  As fee based advisers we are well used to transparency in our charges.  We welcome the RDR and the opportunity it will  bring to increase professionalism within the Financial Advice sector.

If you would like to know more about us and how we as Financial Advisers can help you manage your financial affairs visit our home page: Home Page or send us email at: email@fiduciawealth.co.uk

The information contained in website is for guidance only and does not constitute advice which should be sought before taking any action or inaction. The information is based on our understanding of legislation, whether proposed or in force, and market practice at the time of writing. Levels, bases and reliefs from taxation may be subject to change. Accordingly no responsibility can be assumed by Fiducia Wealth Management Limited, or any associated companies or persons, its officers or its employees, for any loss occasioned in connection with the content hereof and any such action or inaction. Professional financial advice is necessary for every case.

Fiducia are an award winning firm of Financial Advisers based in Dedham near Colchester situated in the heart of Constable Country on the Essex Suffolk border. www.fiduciawealth.co.uk

Fiducia Wealth Management Ltd. Dedham Hall Business Centre, Brook Street, Dedham, Colchester, Essex, CO7 6AD.

Fiducia Wealth Management Ltd. is authorised and regulated by the Financial Conduct Authority.. FCA No. 408210

John Millican, Managing Director and Financial Adviser
Posted in Financial Advice on 24.09.11