Independent Financial Advisers (Regulation)

Sarah Newton Excerpts

Monday 29th November 2010 Commons Chamber

[George Hollingbery (Meon Valley) (Con)]

I, too, will abandon my notes this evening, and restrict my remarks to one or two brief points.

Most of the topics have been more than adequately covered. There have been a great many well-made speeches in which many powerful points were made. There has been a lot of discussion about grandfathering, and I think it is worth pointing out that there are other ways in which IFAs could be grandfathered into the industry other than just a blanket allowance so they can all carry on practising. For example, would it not be possible for IFAs with more than X years of experience to continue advising clients who had been on their books for more than Y years, with their clients’ written consent? I can see no particularly good reason why people should not be able to elect to do that.

Also, if an IFA has X years of experience with no established complaint against their name, might they be able to pay to have an independent examination of their records to establish whether they had been responsible for some of this alleged mis-selling which the FSA is so clear has been going on behind the scenes, but which has not been recognised by many clients? It seems to me that there are ways forward that the FSA could follow to make sure we get the benefit of the experience that exists in the IFA community, and which otherwise looks as though it is going to be lost.

I am very worried that in the short term newly qualified advisers may lose out on the chance to be mentored by experienced colleagues, particularly if large numbers leave the industry. We may well also find that a number of clients suddenly lose the person from whom they have received advice very happily for a number of years, and they might not be at all confident or happy to change that adviser. At a time when clearly so many people have neglected to provide for their later years, it seems to me perverse that we should be reducing the number of suppliers in the market.

[Sarah Newton (Truro and Falmouth) (Con)]

Does my hon. Friend agree that at a time when the Government are making such welcome reforms to our pensions system, people will need independent advice more than ever, and if we press on regardless with these changes there will be increased costs and less access to such independent advice?

[George Hollingbery]

My hon. Friend’s point is, of course, very well made. With auto-enrolment schemes more advice, rather than less, is going to be needed, and there is no doubt in my mind that we need more advice right now. In short, the FSA still has not answered a large number of questions adequately, and I will certainly not be convinced that the retail distribution review is adequate or worth while until we receive some of those answers.