I have always had a business philosophy that for advisers the business year starts on September 1, the start of the new school year, and this year has been a great example of this.
You don’t need me to tell you about the volatility in the markets and the impact that this has on client behaviour but the same seems to have been happening with the providers. Eighteen months ago, you could see the ships lining up off our shores, with life offices from overseas ready to bring their fancy products into our market and then in a clap of thunder they went.
Now, as the market shows signs of recovery, there is a real back-to-school buzz going on. I am pleased to say that this buzz comes not from overseas at the moment but good UK-based businesses.
The challenge for the adviser remains – how do we keep abreast of these changes and developments and how do we keep clients informed of the range of choices? Furthermore, how does the adviser make an acceptable living from their profession in a market that becomes so complex?
I predict a far greater adoption of new propositions in the months ahead as advisers educate themselves in the advantages of choice. Clients will need to accept that certain solutions have to come packaged with a high advice tag which needs to be paid for and they must also understand how these new solutions will provide them with key advantages on their future.
Building client solutions need not be complicated either. More than ever, I advocate the “cocktail solution”, with the use of two or three income generation vehicles rather than just one solution.
Cocktails allow advisers to show their worth and design a retirement income package that will be tax-efficient, adaptable and offer the client the mixture of security and opportunity. The cautious client may like the sound of conventional mixed with fixed term and the adventurous could be more adventurous with a flexible annuity or even as an underpin within a USP proposition. The attraction of fixed term as a base element in these cocktails seems not to have been missed by the two providers declaring their strong interest in a future launch.
Having met 10 providers and two asset managers in the last 10 days, I can say that the market is alive and although it would be wrong to say to a client, “let’s keep our options open because there may be something more exciting around the corner”, the reality is that there probably will be and some clients may be miffed at having locked into a “one and done” annuity proposition that offers no exit, no change and no opportunity.
How does an adviser make an acceptable living in a market that becomes so complex?