Retail Distribution Review

Written evidence submitted by Neil Evans , Vale Asset Management

You have asked for evidence to support (or otherwise) the FSA's claims of there being a direct relationship between the level of qualifications an adviser has, and that of potential consumer detriment. I would strongly suggest to you that the FSA are trying to 'pull the wool over everyone's eyes', as evidenced by their own report, details of which are below:

"We find no statistically significant correlation between consumer losses and either the
qualifications of advisers or their competence."

And

"Surprisingly, we find no relationship between the share of advisers who passed the
qualification exam or the share of competent advisers and either the amount or the
incidence of consumer loss attributable to the PIF. None of these variables is statistically
significant in any of our estimations. This implies that we cannot find a relationship
between adviser competence and consumer loss, though given the data limitations this
can in no way be construed as conclusive evidence that such a relationship does not exist- rather, it should be interpreted as indicative of the weakness of our data."

This is from http://www.fsa.gov.uk/pubs/other/report_predictors.pdf

In addition, I wish to state that whilst I have no objections to raising standards (indeed, I positively endorse this as indeed I hope everyone would), I unequivocally believe the FSA are going about this the wrong way. Timescales, methods of implementation etc need to be reviewed.

In addition, I see no correlation between the removal of commission and the quality of advice. I only see this as limiting access to independent advice for a large percentage of the UK population.

My recommendation is that the RDR should be put on hold pending a thorough review and due Parliamentary debate and subsequent approval.

December 2010