Mark Garnier , Wyre Forest’s MP, opened an historic debate last night. For the first time the interests of Independent Financial Advisors and the effects of the FSA’s Retail Distribution Review, has been subjected to parliamentary scrutiny in the Chamber of the House of Commons.
The debate, called by both Mark and Harriett Baldwin MP for West Worcestershire, also stood out for the unanimity of the MPs that attended and contributed. Jim Shannon MP for Strangford and a member of the Democratic Unionist Party referred to it as “a united front” as 80 MPs turned up to the debate which held only a one-line whip.
Mark and Harriett proposed the debate on behalf of Independent Financial Advisors who they believe are to be “disproportionally” affected by the FSA’s Retail Distribution Review (RDR), a review designed to address the regulation of the retail investment market.
RDR currently requires all IFAs to take exams by the end of 2012 or face disqualification, no matter how extensive their experience. It also has far reaching implications for IFA earnings and costs. By the FSA’s own calculations the implementation of the review will lead to the exclusion of up to 25% of IFAs from the industry and a cost of £1.7bn to the consumer.
Mark Garnier drew particular attention to the fact that it is the ordinary man on the street that will lose out if RDR was implemented un-amended. He requested that the review include grandfathering, a clause to exempt the most experienced IFAs from the exams.
He said “I fear that without the FSA looking again at grandfathering the experienced through the process of implementation and without a rethink about commissions, independent financial advice will become the preserve of the wealthy only.”
The debate also addressed the fact that it would primarily be smaller IFAs, many in rural areas, which would be forced to close thus reducing choice for the consumer.
Mark hopes that the FSA pays attention to Parliament. He also intends to take the issue on to the Department of Business and Innovation, as well as work with the treasury select committee on the implication of RDR.
See what Mark Garnier said in Parliament >>