Industry or profession? | Ten Year Retrospective

by | Jul 19, 2021

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Part of the series of retrospective articles celebrating this month’s ten year anniversary of IFA Magazine. Sue Whitbread reflects on the development of the financial advice and planning profession since 2011 and asks “are we there yet”?

Having started my career in the financial services industry (and I use the word ‘industry’ quite intentionally in this context) way back in 1986, in my opinion it is the last ten year period in which has been the most transformational for the development of this burgeoning profession.

Why do I say that? Well, it all started back with the then Financial Services Authority’s (FSA) Retail Distribution Review (RDR) in 2012. It’s fair to say that the RDR provided a major shake-up to financial advice and advisers in the UK. Those of you who are old enough to remember it will probably understand what I mean. For those who aren’t, suffice to say that 2011 was a pivotal time for financial advice in the UK although the prospect of such radical change was not exactly welcomed with open arms across the board.

Armageddon of Armageddons


Keith Richards, chief executive of the Personal Finance Society, reminds us of some those concerns which abounded back then as he comments: “A decade ago, many predicted that the RDR would result in an exodus of financial advisers, millions no longer being able to afford advice and clients would turn to the worldwide web to figure out how to make the most of their money. The extra qualification and CPD requirements as well as the abolition of commission were seen as the Armageddon of Armageddons.

“But the resilience and commitment across the profession was never going to result in the majority of financial advisers turning their backs on a career where they get to help clients achieve their goals and objectives. Rather than result in the demise of an industry, a profession has emerged which even the FCA has given due recognition to on a number of occasions and reported the average earnings per adviser increased by 21 per cent between 2016 and 2020 as demand continues to increase in line with need.

“It is fair to say however that many advisers did move into a post-RDR world with varying degrees of trepidation and sadly some good people decided to exit. On the whole, the sector has succeeded and continues to advance as a recognised profession in its own right.”


Ok. So there’s our first leading light firmly in the camp of asserting that UK financial planning and advice should now be recognised as a profession.

A changing landscape

Liz Field, Chief Executive of PIMFA agrees with Richards that the last ten years have been transformational commenting “Among the pluses over the last ten years the RDR has led to greater professionalism within the advice sector, as a result of increasing pressure on advisers to gain recognised qualifications. We’ve also seen wealth managers widen the services they offer to include financial planning and advice and provide a more holistic service to their clients overall. Banks have begun to return to the advice market too, partly as a result of the ring fencing of investment banking services. The RDR has changed the landscape of advice, in many ways for the better”.


However, whilst joining Richards in the positive impact camp overall, Field believes that there has been at least one unintended consequence of the RDR which she and her team at PIMFA are determined to address over the coming years.

As she explains “The number of people that receive advice has remained stubbornly low. Just 10% of the UK population say they have ever taken financial advice, while 79% say they have no intention of ever doing so and 62% saying they don’t feel they need help with their finances. Cost is often cited as a large factor, driven by the reforms brought in by the RDR and MiFID II, but also increases to the Financial Services Compensation Scheme (FSCS) levy, which has over the last decade become a safety net for bad actors within our industry as much as for consumers.”

Her point is a good one. The age-old problem of the advice gap remains unsolved.


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