Two watchwords will be at the forefront of David Ingram’s mind as he starts his one-year presidency of the Personal Finance Society – trust and professionalism.
This year the PFS launched its Consumer Confidence Campaign to try to improve awareness and trust in finance advice and it is this work that Ingram is keen to build on. “Pretty much everything we are doing could be described as being linked through to this trust awareness campaign,” he says.
The campaign aims to use the RDR to highlight the big improvements financial advisers have already made in terms of qualifications and professionalism and Ingram says he wants to see the PFS much more engaged with consumers.
“Historically, as a profession, we have gone back to the consumer groups to account for ourselves or we have gone back to apologise, or to explain what has gone wrong,” says Ingram. “What we want to do is make it very clear to consumer groups that we have got a brand spanking new profession here, that things have changed significantly in the run-up to 1 January and since and that we are now an industry or profession that people can deal with with much more confidence.”
Ingram says he is also keen to encourage other aspects of professionalism such as provision of pro bono services.
“We recognise a lot of our members are doing an awful lot of work in their communities, within schools and universities and so on, helping people with financial training and we want to be able to recognise and give them more support. It is not something we want to force people to do, we want to support those who want to do it.”
As well as providing resources and training for firms, Ingram says the PFS is talking to the FCA about allowing pro bono work to count towards an adviser’s annual continuing professional development requirements. “There is no reason why a lot of the work people are doing pro bono could not count towards their CPD totals. Obviously that is something we need to sit down with the regulator about.”
Ingram is acutely aware of the impact of the RDR on adviser businesses. He was a founder of threesixty services and was director from 2003 until 2011. When he left he set up Aimtwothree, initially to help product providers adjust to the changing needs and new business models of financial advisers.
“The support that they had traditionally provided, which was paying huge amounts of money over to the networks and distribution groups, was not really what was required and what was required was maybe a better understanding of the business models that IFAs were likely to adopt post RDR.”
He says the FCA’s current scrutiny of providers’ financial support for distributors is nothing new – the regulator is merely enforcing the existing rules. “They don’t seem to be introducing new rules, they seem to be looking at how things should have been done and are saying that they haven’t been done that way in all cases, and reminding people how they should have been done.”
Aimtwothree’s business has evolved during the period of the RDR and as Ingram’s non-compete agreement with threesixty expired he adjusted his new firm’s focus to include advisers.
“What I really wanted to do was go back in to the IFA side and say: this is what providers have got, there is really no need for you to be as panicky as you appear to be over independent vs restricted and capital adequacy and all of those things.”
One issue that still causes advisers confusion is the FCA’s attitude to different charging structures. Ingram’s view is that as long as advisers are being upfront with clients about their method and level of charging they should meet the regulator’s approval.
“I don’t have any criticism of those firms that are still operating on a transactional basis,” he says. “Three plus a half or even three plus one does seem to be the model adopted by quite a few of them. Provided that consumers and clients have the full detail of what it is they are getting for that three plus one, provided they can see what the cost of that is, then I don’t see that is a major problem. I don’t think the FCA sees that as a major problem either.”
Adviser numbers fell by up to 20 per cent in the run-up to the RDR. There has since been an increase of about 6 per cent, which Ingram says is largely down to advisers qualifying late for the RDR, and he expects numbers to remain steady over the next few years.
“We are working on the assumption that adviser numbers are not going to shift dramatically one way or another over the next three years. We are expecting some advisers to go through retirement but those advisers who have managed to hang on post RDR are unlikely to give up the status they have got or they wouldn’t have put the effort in.”
This raises questions about the growing advice gap but Ingram says this is not caused by there being too few advisers. “It is more to do with the cost of providing advice and the willingness of advisers to pay for it. That is a serious problem.”
But, he says, the problem is not going to be solved until regulators make some concessions towards allowing simplified advice with a lower regulatory burden of full advice.
“I think it is intractable at the moment. We need to see the FCA and particularly the [Financial Ombudsman Service] making some significant moves to support basic advice and low-cost advice.Unless someone is prepared to accept that the standards for simplified advice are lower than the standards for full advice, then we are not going to get anywhere.”
One area the PFS and the Chartered Insurance Institute are making big strides in is the increase in the number of chartered advisers and chartered firms.
So far, 555 adviser firms have achieved chartered status. There are already 3,800 chartered advisers and a further 7,000 aiming to achieve chartered status.
But Ingram says that while he is keen to support increased qualifications, the change in adviser mindset is just as important. He says: “We are very keen to support chartered but we are keen to support all levels of qualification. But it is not just about whether someone is chartered or diploma qualified, it is about attitude and behaviour.”
Born: Brockley, South London, 1958
Lives: Stockport, Greater Manchester
Education: St Dunstan’s College, University of London, Law
Career: September 2013-present: president, the Personal Finance Society; August 2011-present: partner, Aimtwothree; 2012-present: non-executive director, the Beaufort Group of Companies; 2003-2011: founder and director, threesixty services; 1999-2003: director resource initiatives, Bankhall Group; 1985-1988: technical manager, Sun Life Unit Services; 1979-1984: Sun Life Assurance
Likes: Real ale, rugby, honesty and integrity
Dislikes: Pretentiousness, hypocrisy
Drives: Hyundai Santa Fe
Book: Collected works of Patrick O’Brien
Film: Ice Cold in Alex
Album: Wow 13 compilation of worship music
Career ambition: To be part of a profession trusted by its clients
Life ambition: To make a difference and strengthen my Christian faith
If I wasn’t doing this I would be… off hiking somewhere vaguely exotic like the foothills of the Himalayas