Reflecting on the successful Institute of Financial Planning annual conference this month, it is empowering to see the shape that the profession is taking. A community has now been established, with a growing number of certified financial planning profess-ionals established at the top of highly effective financial planning businesses.
One of the ongoing issues we face is the disconnect between regulation and financial planning. This has led to some strange outcomes from regulatory changes and developments. To improve this in the future, initiatives must start with the needs of the consumer and end up with regulation rather than the other way round.
This disconnect has led to a number of queries as to the IFP’s view on businesses that are just offering financial planning outside of the regulatory regime. This has been suggested as a way of dealing with the regulatory proposals and perhaps reducing capital adequacy costs where no regulatory activity exists.
Irrespective of whether an individual is regulated or not, the IFP would expect them to have the appro-priate qualifications and expertise and be bound by the ongoing requirements of the profession. Clearly, the role would be a fiduciary one, with no products to sell and adherence to a code of ethics and practice standards would be a given. The IFP accepts and supports those that have segmented their business and clients to deliver professional services to them.
A community has been established, with a growing number of certified financial planning professionals established at the top of highly effective financial planning businesses
Where the IFP will be on its guard is where individuals are short-cutting regulation or purp-orting to offer something that they patently are not. Some of the banks will describe their service as professional financial planning, when this could not be further from the truth. Many adviser firms similarly give themselves titles that have no bearing on the service that they offer.
As we look to put the roof on the prof-ession, it is important that all aspects are properly considered so that the building is robust and not subject to leaks or huge repairs in the early days. For the moment, with so much confusion over the independent and restricted titles, financial planning firms must concentrate on the nature of their service and client experience.
The IFP is establishing a register of financial planning firms, which will help consumers identify the key characteristics and requirements of the firms they approach for advice. Evidence suggests that there is an increasing consistency, from business to business, which can be captured and used as the focal point of consumer engagement.
It should ultimately be possible for both small and big firms to be recognised as financial planning businesses and for consumers to be able to draw a comparison of what service they might receive outside the products that they may or may not require.
Nick Cann is chief executive of the Institute of Financial Planning