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Beat the clock
Next year will be a key year for us to drive the financial planning profession forward. With just over three years to prepare businesses for life after the RDR, it is important to remember that, for some, three years is the minimum time needed to make the transition properly. This means that the clock starts ticking on January 1.
Many will waste valuable time waiting for a change in Government, regulatory backtrack, a change in European ruling or even the magic fairy to change matters. For those, an opportunity is lost.
Now is the ideal time for practitioners to take this challenge by the scruff of the neck. They have the chance to play a form-ative part in the growth of this exciting profession which will shape retail financial services in the future into something we can all be proud of.
For most, there is a lack of confidence to be overcome. Many will be worried that they cannot pass examinations - even though they have not tried. The reality is that the way of testing and examining is evolving.
With the new framework being introduced during 2010, there will inevitably be greater flexibility and variety of testing to suit different learning styles and timeframes. Most important, as with everything in life, positive action needs to be taken. There is a huge amount of support around but make sure that the right blend and partner is established.
Charging clients a fee is a huge psychological barrier for some. This is mainly due to lack of belief in the real value the client is receiving from the advisory process.
At best, the client proposition is not set out effectively and at worst it is a situation where all the potential value is attached to the product that the client will inevitably want. Even after the RDR, fees can be taken from the product and so there is a halfway house to aim for.
Clients are quite prepared to pay for an exceptional financial planning service which is focused on them and achieving their personal financial and life goals. I am convinced that as more advisers recognise the value of the service they can provide, we will see a huge shift in sentiment by consumers to engage with professionals more readily.
Research undertaken with clients of financial planning businesses in Canada and North America over the last five years consistently proves that clients still regularly hold back from committing all their assets to the management of the adviser or planner.
In most cases, this is simply because the adviser has not asked them to do so. This seems ridiculous when there is a trusted relationship with clients who rate the service highly and is just one example where developing skills as well as confidence will produce positive business results.
The Institute of Financial Planning has been working with its members recently to ascertain the most important areas it can best support them in the drive to achieve their goals over the next three years.
The already comp-elling membership proposition is being developed still further to ensure that it helps to position financial planners and their businesses in the best possible light for January 1, 2013 - if not before.
Nick Cann is chief executive of the Institute of Financial Planning
