Industry must focus on continuing the improved public perception of advice
The advice profession can look back at 2017 with a degree of satisfaction after another positive and progressive year.
From our perspective, we have continued to see growth in membership for the fifth consecutive year post-RDR and our Festival of Financial Planning united more than 10 per cent of the advice profession.
We also secured a post-Brexit European foothold for UK advisers and their clients by officially aligning the qualifications framework of our members with their counterparts across the rest of the continent.
Elsewhere, the FCA’s thematic studies provided a major boost for the value of advice, with 93 per cent of suitability reports reviewed either meeting or exceeding expectations. A significant sample was tested, unlike a similar review for pension transfers via introducer services, which unfortunately revealed less positive results.
The Financial Advice Market Review consultations also resulted in some progress, particularly with regard to the debate and proposals over Financial Services Compensation Scheme funding. That said, more radical reform is required rather than simply re-arranging the deckchairs. I have submitted potential options via consultation with the FCA.
Unfortunately, the year ended on a sour note, with headlines dominated by the British Steel Pension Scheme fiasco. Lessons need to be learned and during 2018 we will be urging the Government to take steps to guarantee that is the case, especially as we are likely to see other similar situations unwind.
As has become the norm, this year brings with it a raft of new regulation. Mifid II is already upon us and will be followed by new General Data Protection Regulation, the Asset Management Review, Senior Managers Regime, Platform Market Study and Insurance Distribution Directive.
We will continue to focus on engagement with the regulator and Government to help provide an environment that better meets the needs of a changing UK demographic, through healthier financial education and the value of financial planning. We shall also be re-affirming our fight against scammers and enhancing our role in initiatives such as the FCA’s ScamSmart campaign.
Of course, care must be taken to protect the legitimate marketing activities of advisers and we are hopeful the appropriate legislation to clamp down on cold calling will be published very soon.
Sadly, the defined benefit transfer market will continue to make the headlines for the wrong reasons – particularly due to the sheer volume of transfers that have taken place since the pension freedoms – giving rise to the problem of insistent clients.
But despite a natural degree of foreboding with regard to regulation and the ongoing DB situation, 2018 promises to be another year of promise and potential for the advice community.
NS&I’s latest Financial Advice Barometer survey found 91 per cent of advisers were confident about the future prospects for the sector (up from 85 per cent in the previous one).
As a result of the profession’s commitment to raising standards and the parallel rise in public perception, I fully expect more people than ever to seek out the expertise of an adviser this year. FAMR’s objective still remains a public interest mission.
Keith Richards is chief executive of the Personal Finance Society