Damien Rylett, CEO at Brunel Capital Partners also sees plenty of positives, but also reminds us of some of the challenges which remain. He comments: “Like IFA Magazine, we are coming up to our 10th anniversary later this year as well. Over that period there have been huge advances across the profession.
“More and more firms and planners are adopting a comprehensive planning approach using cashflow forecasting which has helped to transform the client experience. The use of coaching within businesses, either as a standalone service or just using these skills has also seen advisers and planners up their game and deliver great outcomes for their clients.”
Many challenges remain
Rylett also points out that some things haven’t changed, “for example, the compliance burden, red-tape and costs of regulation seem to increase every year. It’s like taxes and death, unavoidable and outside of our control.”
IFA Magazine columnist and business guru Faith Liversedge also points out some of the challenges. “For me, the biggest change since RDR is that advice has become the product, but at the same time, productisation has increased. As a result, the challenge of communicating the value of advice has never been greater. Alongside this are the changes brought by ever-shifting regulation, the increasing cost of PI insurance, acquirers becoming more picky than ever and the development of robo-advice.”
Damian Davies sees the need for improvements in education around charging too as he explains, “Research we conducted in May 2021 showed that more than 50% of people still think advisers take their income through commission. Incredibly, only 14% of people think advisers charge an AUM fee. I would love to see advisers educating clients over the value of their fees rather than the cost of their fees.”
But Davies has more suggestions for improvement. He comments, “We need to nail segmentation and CIPs. If we don’t this is a massive commercial and regulatory risk for the future. We are still hung up on the idea that segmentation is the same as service proposition. Service proposition is the service any client can receive, whereas segmentation is a matrix of overlapping characteristics that are used to identify clients with shared requirements. Without segmentation, it is almost impossible to have a proper CIP. A CIP is a process you go through to identify products that will match the client’s characteristics. The fund or platform is the outcome of that process. Clients go THROUGH a CIP, they don’t go INTO a CIP. Once we nail these two things, I think we can spend so much more time delivering real value to clients and guiding to their goals.”
Looking ahead, Davies has just one prediction which is ‘that cashflow forecasting will become mandated and regulated for more of advice than just DB transfers. Mandating cashflows will close the shortcomings the regulator sees with suitability, which is linking advice to PROPER client objectives (not manufactured ones to support ‘asset consolidation’.
A rise in diversity and inclusion
Twenty years ago or so, as a woman attending a financial services conference or event I was firmly in the minority – often being the only female in the room. The audience would typically consist of male attendees “of a certain age” with few under 30s to be seen.
The last ten years has seen a shift. Back to Keith Richards again, commenting “Against the pessimistic predictions, 2014 saw a number of advisers re-enter the sector and with succession planning a key consideration, we have seen new talent enter over the past few years. Of note is the increasing number of young women attracted to the roles of advice and paraplanning changing the gender balance. More than 30 per cent of graduates at PFS graduation ceremonies in both 2018 to 2019 were young women aged less than 34-years-old, so the evidence is there for those who want to look, accepting of course that we will always be on a journey.”
There’s also the rise of Next Gen Planners, the membership organisation originally founded by Adam Carolan and Rohan Sivajoti as a community for best practice for younger planners. It’s become so popular that the organisation has expanded its remit. It now has over 300 financial planners, paraplanners and finance professionals in its community who share ideas and approaches in line with the organisation’s belief that to succeed in the modern era they had to “be good or be gone”.
