Lord Flight garnered a mixture of praise and criticism over the past few days after penning a letter to the Financial Times predicting the RDR reforms will lead to only the rich being able to afford advice.
Speaking to Mortgage Solutions’ sister title IFAonline, Lord Flight, a former chairman of Investec Asset Management, explained his strong feelings on the issue and why his colleagues in Westminster were not being vociferous about it.
He said: “Generally, I think people in both the Commons and Lords don’t really understand the issues and are quite willing to accept a moral judgment that commission is a bad thing.
“What I think is particularly mistaken is that quite a lot of the well-intentioned consumer lobby are too elitist to understand the unintended side of things.”
Lord Flight also reiterated the points made in his letter about the direction legislators are heading from in Europe, with the EU now ruling out a commission ban.
“What is wrong with full commission disclosure commission arrangements being required and having individual signed agreements?
“It’s interesting to note that this is what the normally crackpot EU has opted for.”
Meanwhile, the peer, who is also an adviser to the Tax Incentivised Savings Association board, raised another problem with the RDR commission ban.
“It would be a disgrace if non-advice intermediaries weren’t bound by the commission rules,” he said.
“It’s almost better for people to have no advice rather than end up going to non-advice intermediaries, most of whom would be the main banks, who have had the worst track records in terms of stuffing them with bad products.”
