I say tosh to all those who think execution-only services cannot work.
Focused advice or, in compliance speak, limited advice, where a client does
not receive advice on financial needs and objectives but instead receives
advice on one specific aspect or area of need, is another of the issues
which seems to provoke opposing views.
Personally, I think there is a place for both focused
and holistic advice. Going further than that, I think it is good to see
execution-only and direct-to-provider propositions available. The point is
not that one type
of service is better than another but that it is good that
they are all available.
As I see it, these choices are good for consumers which, in turn, is good
for advisers. Trying to adopt a simple outsider's perspective, how might
the various options appear?
l “By going direct, I will conduct all my own research and be able to
collate all the facts myself. This proves more difficult than I had at
first imagined. But, if I do it all myself, I will retain full control.
Against this, I am learning that some of the providers will not deal with
me direct, explaining that there can be a lot of complex administration
which has led them to accept business only when submitted by professionals.
Added to which, I might not even pay less as some providers may operate the
same pricing for direct purchase as they do for IFA-introduced.”
l “By using an execution-only service, I get help. In short, an IFA
carries out all the research and administration on my behalf. All I need to
do is make a decision, which again maintains control, but I must accept
that receiving no advice places the burden of responsibility on me. Of
course, one way or another, I will have to pay for the help I receive.”
l “I can get more help by choosing an advice service. This may cost me
more but it does mean that I have greater protection against buying an
I still need to think through my options but I will only take decisions
once I have received recommendations specific to my circumstances and
l “I understand I have a choice of advice services. I can receive limited
or holistic advice. If I choose a limited advice service, I must accept
that other aspects of my financial affairs will not be addressed. This may
that I risk taking action on one aspect when another may actually be
higher priority. If I choose an holistic advice service, all my needs will
be assessed but this is likely
to take longer and I will have to spend the most time preparing information.”
As we all know, public faith in financial services could be higher. It is
also widely agreed that the continuing drive for higher professional
standards is fundamental to achieving any improvement. But so too is
On a macro level, if we are shown to be inflexible and protective of our
practices, we are unlikely to build greater confidence. I think the range
of advice services available is as such a presentation issue.
Yes, there are issues of concern that need to be dealt with and, yes, not
all the choices are appropriate in all cases but to be dismissive of some
of the options outright would be an own goal.
The forthcoming changes to polarisation will also
have a bearing here. I suppose, with my comments in mind, I should welcome
these changes. But I do not.
I do not believe they materially extend the choice for consumers and will,
therefore, do little other than cause confusion which could damage consumer
In conclusion, I feel that the range of different services on offer
already serves well. I hope that the provision of choice from fully
independent advisers will thrive and that in-fighting over the different
propositions will be left behind as we focus on providing our customers
what they want.
David Marlow is head of marketing at The Annuity Bureau