Advice By Fee _ Debate Continues

Firstly, let us explain what "CAT" means.  CAT stands for Charges, Access and Terms. In simple terms, there are CAT standards that the Government have introduced to ensure that you, the consumer, are safe in the knowledge that a particular product or service that you purchase in the finance field meets Government standards on having clear and concise low charges, good access to your investments e.g. penalty free and have simple terms i.e. no small print!  E.g. you can purchase CAT standard ISAs and Stakeholder Pensions now.  As you may be aware, the Financial Services Authority (FSA), the finance industry regulator, has proposed that people seeking Independent Financial Advice, may have to agree an upfront fee for any services and this then be settled either by fee agreement or by taking commissions up to the agreed fee level when the works are completed.  This is known as the de-polarisation debate . Independent Advice will be simpler to understand and removing the mystery and bias towards commissions which tarnishes certain parts of our industry.  This will differ to advice obtained from other sources such as tied advisers e.g. a large bank who owns its own insurance company and only sells its own products or distributor advisers who are linked to just a few companies.  Such tied and distributor advisers will still be able to take maximum commissions if they wish will no need to agree a maximum charge.  The Treasury have also issued a proposal for CAT Marked Advice which will mean that advisers who wish to remain Independent and want a Government CAT mark for good value will have to sign up to a new code and agree to a maximum fee level set by the Government or regulator when offering advice.  We fully endorse this approach and believe in the principle of good value for money services and products.  Indeed, it is a model that we already operate for many of our advice based clients.