View more on these topics

Commentary – John Ellis

There continues to be a huge gap between the type of advice that the consumer effectively receives from our industry and, while some prefer the service of a direct offering, there are many that require and value advice, in all instances what is available comes in many variables, but generally fall into the following options, the good, the bad and the extremely ugly.

Misselling scandals and regulatory changes aside, many of the issues come from the ongoing servicing and value that we provide our clients.

The fact that, as a sector, we are paid renewal and trail commission, often in advance, is seen as a God-given right, which is is

disturbing to me, as the pressure is put on the fund houses.

We cannot continue as an industry to get payments specifically designed to compensate for ongoing administration while so many in the industry continue to treat it as a rightful legacy for a sale that took place many years before.

In the changing environment, the relationship between provider and distributor would greatly benefit from working together in shaping advice and what we offer to our clients.

It disturbs me from the industry meetings I often attend that there are still those of our competitors that trade on the concept of take everything you can get now and move on to the next client.

This is a view that focuses on what can be achieved as an absolute maximum in the short term but it is a view and practice that cannot survive in a depolarised, post-Sandler environment.

We are now focusing our thoughts on how we can help product providers in the reduction of TERs to ensure that, after Sandler, there will be some chance of survival and starting to change perception.

In essence, I see our role not merely as client-facing professional advisers but over the coming years to be adaptable and flexible, offering hybrid third-party admin/sales and an information hub that will change the industry&#39s perception and the consumer&#39s perception of the role of the IFA and our industry.

We are shifting our business model on the direct side from a pure sales-driven process to a vehicle that will allow the statutory obligations imposed upon product providers and fund managers in terms of client reporting and basic admin service to be interphased with every level of information/sales outlet that exists in our sector.

It will be, in effect, the first opportunity we have had as a sector to remove ourselves from the image that so much of the public has of our role as insurance salespeople. We will become an important facet of the overall standard practices of the retail sector, we will service, inform, advise, sell to and assist product providers. I believe this has to be the way forward.

In the words of The Clash, “Should I stay or should I go?” If the changes necessary are not adopted, then there will be trouble.

For many, the additional workload as a consequence of increased client contact can be seen as a negative. However, the positive aspect of this can only serve in adding much needed credibility to our industry.

This is an opportunity for us to work together and co-ordinate our activities as provider, distributor, regulator and trade body in reversing the harmful perception that has alienated us from the consumer.

At the heart of our business is the need to provide a clear flow of information and regular consistent offer of advice which will propel us as an industry to the dizzy heights of what should be a genuine service industry that does not lose focus on why we are here.

Richard Craven is chief executive of The Money Portal


Readers will be aware of the policy discussion sparked off by the LIA comments on the FSA&#39s CP194 on Training & Competence.

The issue is simple. Do we require certainty and consistency in exams for practitioners or should we leave the decision on key elements of training and competence to a dialogue between authorised firms and the Financial Services Skills Council? The latter has no powers of enforcement beyond the proposed “evidential provision”. There now seems to be doubt whe-ther the skills council will take forward the exam review in the envisaged timescale. So, we say, retain FSA “approved examinations”, with the FSA enforcing the exams.

We have been a lone voice in arguing for all practitioners to take standard exams and back that up with good quality CPD. The

marketplace seems to want to have freedom to reduce the cost of T&C. We say the level of confidence in the financial planning profession is related in most part to its ability to demonstrate “approved” and consistent levels of knowledge.

There is a question which goes wider than training and competence.

Just what has regulation achieved to ben- efit the consumer? We need to get back to basics. Should we allow the public to take risks with their welfare when they could be insured for fairly minimal cost?

In 2004, we need to re-examine our priorities. I would mention two for starters. We need to make sure the financial advice profession has sufficient knowledge and motivation to identify the priorities of clients and to make sure they are properly protected and, if there is any money over, encouraged to save.

We need a crystal clear, agreed set of examinations, structured continued learning and simple easily understood principles of conduct. Any complexity or ambiguity in the requirements will lead to dilution of our message and standing.

If we can do nothing else but these two things in 2004, our

reputation will start to improve and the public will be better served. But we cannot leave it to the FSA alone to bring this about.

It is time for the financial planning profession to take control of its own destiny.

John Ellis is head of public affairs at the LIA


Hope and cheer for the new year

It was a nasty old year for IFAs in 2003. The main culprits were PI and continuing negative investor sentiment. Some advisers struggled and hundreds quit while few matched the scale of profitability of three or four years ago. There were some big losses, although a huge number of intermediary businesses remain profitable. But was […]

Friends fined £675,000 for mis-handling mortgage endowment complaints

Friends Provident has been fined £675,000 for mis-handling of mortgage endowment complaints. The Financial Services Authority said Friends was guilty of failures in its procedures between October 2001 and February 2003 which led to the mis-handling of mortgage endowment complaints. Friends Provident received 21,788 mortgage endowment complaints between March 2000, when its dedicated complaints handling […]

Britannic star Roberts quits to run Aegon income funds

Aegon Asset Management has poached Britannic Asset Management star manager David Roberts to replace Old Mutual-bound Stephen Snowden as head of retail fixed income and manager of its extra-income fund. Roberts, who is believed to have been a target for Old Mutual after Richard Woolnough&#39s departure to M&G, manages BAM&#39s flagship corporate bond and high-income […]

Nationwide – 2-Year Fixed Rate

Type: Fixed-rate mortgage Fixed term: Two years Fixed rate: Up to 95% of valuation 5.49%, up to 90% of valuation 5.09%, up to 75% of valuation 4.99% Minimum loan: £1 Maximum loan: Up to 95% of valuation subject to a maximum of £200,000, up to 90% of valuation subject to a maximum of £300,000, up […]

Tax year-end planning with the family

From the Technical team at Prudential Let’s face it, many aspects of financial planning involve a lot of technical detail. At our face-to-face events, we’ve had great success bringing these technical topics to life through the use of practical case studies. Meet the family Prudential’s Planning Matters hub brings together a fictional family and explores […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers. Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and thought leadership.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm