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Engaged tone

As many got their sea legs on board PIMS, I headed for Italy and the EFPA conference, where I was speaking.

Despite Mifid, it is clear that we in the UK have a less prescriptive regulatory regime than our European counterparts.

In fact, I would suggest that there is as much as 10 years of evolution in the EU before we are on the same page.

In education terms, this is also the case as they head to the benchmark levels we set many years ago. In some European countries, the CFP is in place but what is missing is the same level in each state.

The international part of the CFP is manfully trying to raise standards so that the disparities go away but that is a long job and one that does not carry easy local support.

There is no doubt that some will try to dilute standards as the RDR takes shape and that is regretful but not surprising. Indeed, as the regulator moves to principles, my market intelligence tells me that many forms are heading in the opposite way by becoming increasingly prescriptive.

This is ironic but at the same time a worrying trend and perhaps underlines the feeling that the regulator may be moving one way but the FOS is heading on its original course.

The onset of treating customers fairly inspections may at last remove the McKinsey speak to the point where we all know just what is necessary to comply and keep customers economically serviced.

If you have not already read it, I would commend to you the recent research by Advisor Impact on the Economics of Loyalty. This survey looks at client loyalty and reflects how unsticky many clients are in reality.

The survey essentially looks at four levels of clients, ranging from disgruntled to complacent to content and on to the engaged client. The latter is nothing to do with their marital status, it reflects their loyalty to the planning firm.

The disgruntled client clearly needs to be picked up early and in all the stages, the information overload without one-to-one meetings is only going to lead to disaster.

If we are to get referrals from our existing clients, we need to engage them, whether they are engaged or content.

Client participation is key. The days of leaving them in blissful ignorance have gone and we need to ensure that they know what is being bought in their name. We need to be almost educators if this plan is to succeed. A system of educating clients must be developed.

The report closes by noting that many clients, that is, almost all, do not know who their adviser works for and have not looked at costs v value for money as clients begin to understand and recognise the added value promoted to them by advisers. This highlights why customeragreed remuneration will be a major hurdle unless firms start to map their process and deliver that elusive added value.

As I practise the Italian for my opening gambit, it causes me to reflect that we have come a long way and now there is far more of a profession than an industry and that is no bad thing.

More people in the industry graduated as chartered financial planners at the Guildhall Last week. After all the hassle that we had securing the title, the thanks from those graduating made me reflect that the day we are lumped in with lawyers and accountants as professionals is not that far away.

So, journalists and planners, let’s all make a pact not to refer to the industry but to the emerging profession. Robert Reid, Syndaxi Chartered Financial Planners


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