Things have changed enormously in just 10 years. 1999 was the era of dotcom euphoria. Everyone seemed to be making money, the FTSE was peaking at nearly 7,000 and we had had an unprecedented decade, where the markets finished above where they started for 10 years in a row.
Flash forward 10 years and the picture is very different. Over the last 10 years, the FTSE 100 is down by 30 per cent and unemployment is at its highest level for nearly 15 years. Suddenly, boom and greed has made way to fear and trepidation and while people still depend on good advice, the industry in which we advisers operate is almost unrecog-nisable to the one that existed when Helm Godfrey was born.
A key change is advisers’ ever increasing and complex regulatory burden. Tax rates have changed dramatically and higher-earners are looking at a 50 per cent tax rate, with a significant change to how they fund their retirement income. At the same time, final-salary pension schemes are all but dead in the water.
The great thing is that, in response to these challenges, we are also seeing a new genre of adviser emerge, which is committed to raising the standard of advice to a level not seen before. Less sales-focused, they appreciate that there is much more to quality financial advice than selling products for up-front commission.
Improvements in technology are one reason for this, as they have hugely increased our ability to offer a better service to our clients. Exams are ano-ther key part and while many of the older generation may not always see their necessity, I believe they are essential if we are ever to stand shoulder to shoulder with other professionals such as lawyers and accountants.
As tax changes and regulations become ever more complex, as I have no doubt they will, more and more people are going to need advice at a higher level and with the RDR likely to completely overhaul the industry and people becoming increasingly knowledgeable about their own finances, genuinely independent advisers are not only going to become a bit thin on the ground, they will also be in high demand.
The actual style of advice from these chosen few will continue to change as well. We have already seen the emergence of the new model adviser and many of these are turning to life planning. This is something that I expect to continue in the future as more and more advisers realise the importance of life planning and the profound effect it can have on their clients and themselves.
Bruce Wilson is managing director of Helm Godfrey