Brits Are Still Not Thinking Hard Enough About Growing Their Savings, Says Jeremy Roberts, Blackrock’s Head of UK Retail Sales. Neil Martin Reports
Here’s a conundrum for you. Why are nearly 60% of all UK private investors unwilling to take any risk whatsoever with their money, even though most financial advisers are broadly optimistic about the markets over the next three years?
And why do most investors (nearly 70%) keep their savings in cash, and say they intend to put more of their money into cash, even though the projected lengths of their lives after retirement is growing and cash alone won’t provide a good enough income?
Perhaps it’s because only 14% of the British public use a financial adviser. Well, that’s what emerged from our recent conversation with Jeremy Roberts, Head of UK Retail Sales at BlackRock.
A Difficult Mission
Roberts sees the education of the British public and their money as one of the most important roles for the IFA community to get right.
“The vast majority of advisers are focusing on retaining clients,” he says, “and they need to persuade the public that their advice is worth paying for. They need to articulate the value of that advice, because staying in cash is not a great solution for the end consumer when you factor in the effects of inflation on cash which is currently yielding next to nothing.”
Roberts and his team spend their working day liaising closely with IFAs, a job which includes hosting their own Blackrock conferences around the country. After each conference he quite bravely asks the assembled IFAs to fill out feedback forms – and it is these, plus a number of Blackrock surveys, which builds a picture of the current advisory sector.
“We ask our advisers their current thoughts on markets, where they are potentially going to allocate more money to, less money to, how optimistic they are, and so forth. So it’s really taking the temperature of the advisers, and of course the end consumers in line, that’s extremely important to me.”
Groundwork
Roberts also pays a large number of personal visits to IFA firms in order to gauge the temperature out in the field. And this, he says, helps him and his team continue to provide the products and services that they think the IFAs and end consumer needs.
The fact that IFAs now have more on their plate than ever has led to an inevitable outsourcing of fund selection and asset allocation – but Roberts sees this as a positive, because he says it allows IFAs to focus on their core competency of financial planning.
Asked how he thinks IFAs have handled RDR, he is generally upbeat. “On the whole, they’ve coped pretty well. I think the IFAs which have really benefited have grabbed the opportunity to redefine their businesses and to differentiate themselves by focusing on the quality of the service they provide for their customers.”
“Clearly, this has meant that they had to ensure that they were appropriately qualified; that they communicated the changes to their clients; and that they produced a simple and clear charging structure for the advice they’re providing. So I think on the whole they have coped pretty well.”
“It’s undoubtedly a better industry where fees are more transparent, where there’s enhanced professionalism and it has also meant that the quality of advice has had to improve.”
IFA Clients Are Happy
Quoting his surveys again, Roberts points to the welcome news that although only a small percentage of people use an IFA, nine out of ten among those that do are happy with the service they get.
“Those investors who do use a financial adviser told us that they are more confident about making investment decisions, more confident, and more positive about their financial futures. So I think we have a duty quite frankly to continue to improve the financial education that we provide to the investing public.”
Another bright spot is that some 65% of the advisers questioned said they intended to take further professional qualification over the next two years.
That All-Important Longer View
On a more negative note, however, Roberts shares the common industry concern that the retirement bomb is ticking more loudly than ever and that the British public are simply not doing enough to fund their longer-term retirements.
“We are all living longer,” he says, “and on the one hand that is great – hurray! But what it does mean is that we have to take saving for our retirement for the future more seriously. Most IFAs tell us that their clients are not factoring in a longer life expectancy into their savings and retirement plans, and that they are too focused on short term returns.”
An Eventful Ride
I then asked how Roberts got his entry into the financial service industry. He explains: “My father has been an insolvency practitioner for many years, so I guess I’ve always taken an interest in financial services, what drives businesses to succeed and fail, so I suppose that was always in my blood”.
“Then after graduation from University, I worked as a temp in financial services for about nine months, doing literally as many hours as I could fit in so that I could fund a five-month trip around the world. That was in 98. Then, on my return to the UK, I went for an interview at Mercury Asset Management. I joined in October 99, and it was a truly fascinating start in the City, from dot.com boom – “isn’t life fantastic?” – to subsequent crash, so it taught me a lot about taking risk. And then, 15 years later, a couple of mergers and acquisitions of course along the road, and here I am at Head of UK Retail Sales at Blackrock.”
What does he do in his spare time? His family fills most of his time outside of the office, he says; and you get the feeling that Roberts is a very busy individual who has little time to develop his love of golf and tennis. “We never have a summer slowdown at Blackrock,” he says. And nor, we suspect, would he want one.
