Garnier plea fails to bring out pro-RDR IFAs

Mark Garnier, a member of Treasury select committee, says he has not seen an increase in correspondence from pro-retail distribution review (RDR) IFAs following his call for supporters to come forward.

Mark Garnier
Mark Garnier

Conservative MP Garnier made the call at an event in London last month but says the majority of letters he receives are still critical of the RDR.

He says: “There has not been a sudden tidal wave of people saying ’thanks for the invitation, we agree with the RDR’. Perhaps there have been three or four out of 20 or 30 letters in the last month.”

Garnier made the call to challenge an assertion by Stephen Gay, the director general of Aifa, at the all-party arliamentary group on insurance and financial services in December that protests over the RDR are coming from a vocal minority. Garnier says: “The challenge to Aifa and the rest of the pro-RDR industry seems not to have been met.”

Garnier also raises questions about the data in the cost-benefit analysis sent by Hector Sants, chief executive of the FSA, to select committee chairman Andrew Tyrie last month. (article continues below)

It cites an annual consumer detriment cost from previous mis-selling reviews of £223m and estimates the actual cost owing to mis-selling is between £400m and £600m.

“I get very uncomfortable when the FSA starts spouting out estimates like these”

Garnier says: “I get very uncomfortable when the FSA starts spouting out estimates like these. The trouble is you just do not know if they are going to be accurate. Until you can quantify it properly, the numbers are just meaningless.”

He adds the FSA should have included cost estimates for detriment to consumers caused by advisers leaving the industry alongside its estimated £1.7 billion implementation cost.

He says: “If the FSA is going to try to extrapolate for mis-selling costs, then it is reasonable to try to work out the detriment caused to levels of saving and protection by the RDR due to advisers leaving the industry.”