As discussed last week, the regulator, being the regulator, will regulate. That is what it does. It is its job. Ensuring we are compliant is expensive and exhausting but it is not the same as ensuring we have a robust strategy. There is overlap, for sure, but it is not a substitute.
While it may be tempting to pause for applause while awaiting the next set of hoops to jump through, this routine is unlikely to yield the results we hope for.
As the rapid pace of change continues, there is little certainty around how the industry will look in, say, 20 years.
We are (understandably) very internally and short-term focused and the industry (regulator included) is still grappling with the details of Mifid II.
But as one adviser put it recently and I stated last week: “Regulation won’t kill businesses; poor business plans will kill businesses.”
With so much business recalibration and defibrillation centred on regulatory requirements, how far have our models been truly constructed around what the client wants and how they want it?
As the shift to a higher level of service delivered to a smaller group of wealthier clients continues, so too does the need to refine what service looks like to different client groups. Most advisers segment on the basis of asset size – offering corresponding tiers of service – but is a more refined approach needed, if not mandated, through the FCA’s Prod rules?
Just because a client meets your (fund-based) criteria for full service, it does not necessarily follow that they will want to see you four times a year, as delightful as I am sure you are. Equally, simply dressing up a last-century IFA business as a wealth management company and adding a bit of gold leaf to the business card will not wash either, with clients or the FCA.
With every man and his dog purporting to play in the £100,000-plus assets under management pool, what will truly differentiate your business?
I am reminded of the following famous sketch from Blackadder.
Melchett: “Field Marshal Haig has formulated a brilliant new tactical plan to ensure final victory in the field.”
Blackadder: “Ah. Would this brilliant plan involve us climbing out of our trenches and walking very slowly towards the enemy?”
Captain Darling: “How could you possibly know that, Blackadder? It’s classified information!”
Blackadder: “It’s the same plan that we used last time and the 17 times before that.”
Walking dutifully over the top in regulation boots might not be the best way of surviving what is coming next.
Phil Wickenden is managing director of Cicero Research