Retail Distribution Review

Written e vidence submitted by Graham Franklin , First Financial IFA

Rather than load criticism on the FSA, Trade Bodies and the Examination Groups who all have clear vested interests in the RDR, I put forward the following suggestion on behalf of my and many other older sole trader IFA’s clients:

1.All new entrants to the profession must be level 4 qualified
2. All IFAs up to age 55 on 31.12.10. must be level 4 qualified by 2016.
3.All letterheads / business correspondence should list the level of financial
qualifications.
4.IFAs over 55 at 31.12.10 should complete annual gap fill CPD in the areas in which they specialise with evidence of testing of knowledge. The FSA could establish this from the cost of our fees
plus an extra levy from those advisers over 55. By 2016 virtually all working IFA's will be fully level 4 qualified.
5.Allow clients to decide how we are remunerated. My clients pay via fees or
commission and they have done so over many years. My charges are spelt out up front before any agreement is signed. I wish my accountant and solicitor would adopt the same practice.

This allows me and other sole traders in my position:

1.To continue to work for a few more years,
2.It allows me to keep my knowledge upto date,
3.It allows my clients access to the advisor they have worked with and trusted
over a number of years,
4.it allows for fair charging for the work I do in the way the client wishes to
pay for it,
5.It allows the younger element of the profession to obtain the level of academic
qualifications the FSA require,
6.It gives the client choice as to what type of IFA they require, those with
higher qualifications vs those with greater experience.

The FSA have already signaled that they are conc erned about the efficacy of the RDR, so they should consider modifications, the clients surely deserve choice in
who advises them and how they pay for that advice. There are however 2 groups of people who will be angered by these changes and I don't mean the banks although they have much to gain from the demise of the sole trader IFA.

1. The trade bodies and examination bodies whose fees are a real problem for the sole trader

2. The larger IFA groupings who traditionally have younger IFAs who feel we
should all sail through exams never mind the cost to our businesses in terms of
time and monetary cost .

Neither of these groups are clients which is what the RDR is about. So lets
be sensible, modify the system don't destroy it. This country has a long
tradition of abolishing systems and replacing them with things that are even
worse.

January 2011