This is a cow, rather than a bull, but it’s quite a nice picture. The animal’s tongue is sort of funny, and the hair over its eyes means you don’t really know where it’s looking. Anyway, you get the idea, you’re all teed up for the blog, and literal imagery from free photo websites is all I have the energy for right now.

FAMR could have been huge. It could have been beautiful. It could have been the equivalent of three lines of really good crank washed down with a triple espresso for the good end of the advice profession. It could have done so much.

But it didn’t.

Instead, what we got was 80-something pages of prevarication, wisnae-me-guva! sloping shoulders, and 28 recommendations, 21 of which were suggestions of further consultations, working groups (who’ll do, er, consulting), working parties (Worst. Party. Ever.), working together, exploring options, discussions, and other synonyms for consult.

The remaining 7 break down like this:

  • 1 new factsheet
  • 1 new advice unit, sort of
  • 1 new campaign to make sure advisers charging adviser charges understand adviser charges
  • 1 nudge to FOS to publish better data
  • 1 nudge to FOS to be open about where they suck and to, in the fullness of time, suck less
  • 1 no-longstop decision
  • 1 new report in 12 months to say how we’ve got on with the consultations

We actually counted a couple in there which were consultations on whether there should be consultations. Lots of the consultations won’t be until 2017, with a following wind (but we’ll be in prepping-for-MiFID II-land by then so don’t hold your breath).

They forgot to put a recommendation in to not bring back commission, but I’ll credit them with that one too.

Iâ??m being harsh, and flippant. Could you tell? But for a paper which had such potential, this really does feel half-a-loaf. Not that you’d know it from the slew of vested interests ‘welcoming’ it, of course.

A few more serious observations:

  • The decision not to recommend bringing back any form of commission is right. While it would have pleased certain providers, it would have backfired. We don’t know exactly how, but it would have. Any industry which came up with something like indemnified FBRC can’t be allowed to go there again.
  • I’m less sure on the long-stop. I think there was more room for nuance here: or at least a working party to investigate the viability of further consultation, to report back in 2019 or something. They can do it for everything else!
  • Reworking FOS funding to take the heat off firms doing a good job is the best bit of FAMR; we’ll watch closely (as will all advisers, I’m sure) to see how it’s handled.
  • Redefining the advice/guidance split is important. Partly to allow sensible rule-of-thumb advice without needing to create a 30-page suitability letter, but also because it’s one of the biggest danger points for consumers. It’s clear that FAMR is clearing the way for the banks to get back into the market, but without very careful handling, it could end up being bent and broken by organisations which haven’t evolved as far from their high-pressure sales culture as you might think.
  • If I’ve read it right, two key observations of FAMR are that it’s cheaper to distribute through the workplace than one-on-one, and that technology can reduce costs (though try telling that to Old Mutual in light of last week’s £450m platform announcement). I for one am grateful that I’ve had that pointed out to me, unaware as I am of things that are blindingly obvious.
  • Pensions dashboard, this is a Good Thing, but of course implementing it will be brutal. We’ve seen providers unable to give pension investors their own money out in a timely fashion; imagine making them all integrate their data to a central hub. It’s doomed before it’s begun as an industry-generated scheme: the only way to get it to work is to make it compulsory and government-run, and God help us all if that happens. If it could be allied to a pot-follows-member strategy, a bit like SuperStream in Oz, then there might be more hope for it, but that really just means more than zero.
  • Freeing pension money up to pay for advice prior to retirement has the potential to be a good thing, but (much like the advice/guidance thing) the potential for devilment is massive.

We’ll write much more on all this stuff as we digest it. But it strikes me that FAMR was maybe doomed from the start: for certain it can’t be the fillip to Harriet Baldwin’s career that we all thought it might be.


The advice industry is incredibly well evolved to serve people with money. It is not suited to serving those without money. That’s not its fault: it’s not there to be an engine of social policy. As I read through FAMR’s pages, I’m left with a feeling that what the report would like to say, but can’t, is that what it really wants is sales. All the talk of nudging, of hard and soft incentives, of getting the cost of advice under control. it’s all trying not to acknowledge the old DSF adage that these products (and yes, planners, this is all about products) are sold, not bought.

The paper, then, stops short of redefining how individuals are brought into saving and investing. Its bottom is sore from sitting on the fence. It doesn’t give the clarity that those investing in future propositions crave. As the guys at Nutmeg pointed out, it doesn’t do anything on disclosure and transparency.

All we can do is to hope the many, many forthcoming consultations have teeth and people involved in them who know what the sharp end of giving advice feels like.

Until then, we call bullshit.