This is the document put out by the FCA yesterday. It’s support that I support.
I’m not going to be able to do 251 pages of research due respect but will use some of the key images that hit me as I read it for the first time on a train.
It is important that we focus on what the FCA want to do, the aims include protecting savers through FOS but end by heralding a “healthy investment culture”. That firms are fearful of promoting long-term investment in real assets is obvious. It is not the culture that prevailed when I came into the pension industry in 1984. Then it was quite obvious that over the long-term we would do better investing than sticking all our cash under the mattress (and people did in those days). For mattress read Cash Isa or bank account but the reality is that we are under investing our savings
This chart could have been produced for me in the early 1980s and I’d have got it.
Targeted support
Not individual advice, but group advice for most people which is free; with the option to get simplified individual advice or the holistic advice for those who need and can afford it.
I’d like to think that “targeted support” is what this blog gives , it is free and it is responsible, it is not leading to a product or a provider and it leaves people to make their own decisions. Why shouldn’t people have their opinions? Why shouldn’t they share them? We live in a liberal liberated country where regulation is against those who abuse the system with no thought for the good of the people they advise.
The need for more support
The large behemoths that manage the money for the masses of us (me included) need to step up and fill the advice gap that they never properly filled with commission based sales forces. Here is today’s evidence
The big difference between today and 1984 when I started was that the only hope you had if you weren’t in a company pension was commission based sales forces who got you saving into products with charges in the first two years contributing of 4% + for ever. It was a disaster for the consumer and unless you found yourself with a non-commission based house (Equitable or London Life) then you were in back-end loaded structures that sounded good but were disastrous.
Things aren’t like that today. Now we have a range of retail friendly products from workplace pensions and regulate personal pensions which are much better value. ISAs outstrip the endowments and maximum commission investment plans we used to sell. We are in a sensible world which, so long as you don’t follow the advice of the tic-toc influencers and stay with FCA regulated firms – you will do alright.
So I am with this move to targeted support because I am confident that the retail products that get people into real investments are good news. So long as you have a long-term view, investing in real assets – equities – infrastructure -property is good news provided it is done collectively and at scale. For those who want to do things on their own, there is simplified and holistic advice or execution only without advice. People may want to self-research and invest for themselves – they are allowed.
Thanks to the FCA for this huge report, sorry that I am not getting into the annexes and the detailed research, that’s weekend stuff. Right now I’d like to tell those younger than me (most people nowadays!) that we have a better regulated retail market and better products for us to invest in. It’s a whole lot better than 40 years ago!
