Tisa calls on FSA to rethink rebate ban

How many more and what does it take to get the leviathan to see sense?

Their five main principles are:

Maintaining market confidence; promoting public understanding of the financial system; contributing to the protection and enhancement of the stability of the UK financial system; securing the appropriate degree of protection for consumers; and fighting financial crime.

Where does obstinacy figure in this?

(My goodness looking at these it is a sad reflection on how they seem to have failed in so many respects. Any other organisation with this record would have had shareholders raising Kane and heads would have rolled).

Rebates are very simple things, they exist to give a wide ranging aalmost never ending discount without endangering the business that issues it, these should be hidden from the competition for these discounts otherwise they do not work properly.

In manufacturing for instance most firms could for example buy 5 million units, so that remains the normal price, one may put in an order which could reach as much as 50 million, to protect the manufacturer from too much exposure to this one client, the rebates go up in bands and if the firm does in deed buy 50 million units they get the rebate promised but only at the 50 million band. If it didnt operate this way and a deal for 50 million units was given at rock bottom price from the purchase of the very first unit and the firm went bust after only buying 5 million units the manufacturer could be in serious financial danger.

Rebates usually operate in volatile markets subject to large sale variations, such as ours or in industries influenced by the weather etc.

To show everyone's purchase prices would reduce the manufacturers apetite to offer discounts as it only invites problems.

Having different share classes limits and reduces discounts.

Ultimately higher charges for the public.

This is really basic business stuff and the regulator should already have been aware of this.

Just so much complexity and hassle is brought to the table by this type of action.

Ultimately if it is the client's money and adviser fees come out explicitly then so should platform fees as well

Question to the 'It's Friday afternoon and I've run out of steam so I'm reading Citywire' crowd:

Is it me or do Harry Katz & Phil Castle seem to have opinions on every article on Citywire judging by their extensive 'blogging' in these pages?

When do they find time to write any business?

Keep it up chaps. Your comments are more often than not spot-on. But seriously, where do you find the time to squeeze in your clients?

I made a decision to spend a lot more time trying to influence opinion pre RDIP having failed to pay attention with FSMA 20000 so that the environment post 2013 is more to my liking than some people are trying to force through.

I failed to get involved in the late 90's and as a result I am to blame as the next IFA that the longstop was allowed to be dropped from the rule book and now want to make sure that there is no more splippage on such important human rights.

I want to try and make sure people actually read things like the FSAs RDR papers and anything that may affect their livelehoods rather than simply take what the misguided statements of some say when they haven't actually read the documents to do with the RDR. What they are trying to do at the FSA with RDR is laudable, but to often it gets distorted by vested interests by those with time, money and inclination to influence it. I may not have the money, but I have set aside mental time to influence.

As you suggest by your comments, it is a priority thing. Is the priority to write lots of new business, or simply to write enough to live on. Harry is about 20 years my senior and probably only does the job because he enjoys/loves it now. I am in my mid forties, but both children have now left home and my priority is not money, it's doing a job I enjoy/love and helping my clients while making a decent (but not obscene) living. If someone wants to pay me an obscene amount, I will nto stop them however, but they will do it knowingley.

Hope that answers the question, now off to Broadstairs Beach (Viking or Louisa Bay for a quick swim or Kayak or the pub)

Just seen that three of us in Broadstairs (all of whom I have worked with at one time or other) have been "mystery shopped" in Financial Adviser Magazine and we all seemed to come off quite well as being helpful, must be teh sea air. Quite ironic for me as I hate doing mortgages and spent more time explaining I only arrange mortgages for exisitng clients than anything I think and still came across as trying to do what I hope we would all do which is help a first time buyer know where to start.

Most IFAs want what is best for the consumer, if the consumer buys in to this industry then in the majority of cases they are in a better position than they were before and we make no bones about it our job is easier and we also make a decent living if clients are buying in.

The larger voices in this industry appear to be from people who have little if any consumer or actual advice link and often are using their skills and resources to influence the industry to meet their own personal requirements/vested interests, or some are just passing through such as in the FSA as they attempt to reach the dizzy heights and huge potential wages in quangos etc- up to £650,000 per year is up for grabs, you cant blame people for wangling their way in to these jobs.

I think all IFAs have a duty to rip through these pretenders and show those in influence that have no experience of the industry or the consumers (in an adviser context) for what they are. Change for change sake with no direction or purpose and not based on fact, simply to add something to their CVs or to demonstrate an office is working, doing something, is not acceptable.

I try and read as much as I can, like Phil and point out as many rights or wrongs as I see them, to attempt to try and keep the adviser perspective and of course client perspective in the main press.

Some poeple write articles so well if one knew nothing of the subject then it could appear feasible, hopefully we restore some balance.

We can but try. So every coffee break, lunch and at the start or end of the day, read read read and comment if we have something to say.

Only just seen this as I have been a might busy.

1. I don’t ‘write business’ as you put it. I actually advise. True this is in the form of written reports, but the client pays for the report; what they then decide to do afterwards is their affair. The transaction part (if there is one comes free). Believe me I do make a living.

2. Time. I don’t actually sit and type each comment (Only the short ones). I have one of those old fashioned things called a typist, who is also computer literate and knows how to post comments for me. I’m also a sad soul who uses a dictation machine and keeps it by him most of the time, so when thoughts occur…

3. I also work about 65 hours a week – sometimes more.

4. I read Citywire on line to keep up.

5. As a sole trader I think it is important for the little guy to make his voice heard – otherwise the big players and the networks will run away with the ball

6. I am currently on the AIFA Council and supposed to be representing small firms. I therefore consider it part of the job to be a bit pro active.

Hope that answers your query.