We recently held our annual gathering of PFS regional volunteers in Birmingham and with over 100 in attendance, we attracted the highest number of attendees ever. This alone is encouraging as it meant members taking time out of the office for the best part of two days, to learn about our plans for the year and how they, as our supporters, could help us deliver them.
More encouraging however, was the upbeat atmosphere; early days I know but all of those I spoke to seemed to be positive about the future and in fact most were saying they had never been busier. Of course being busy doesn’t necessarily mean higher profits, which is why it is so important to get the pricing of services right. Getting clients to pay for all the work you do still seems to be a concern.
Efficiency has to be the next most important factor in running a profitable business and making best use of the advancements in technology, increased use of paraplanners and outsourced services all appear to be rising. But what else can help to increase income and profits? Well, the obvious answer is more clients.
The CII commissioned a follow up survey to one conducted in 2011 on consumers’ views on the financial advice regulatory reforms. It was designed to find out whether the knowledge of RDR had increased amongst the public over the last few years. The survey split the results into two categories, those who have received financial advice at some point and those that have never taken advice.
The results evidenced that awareness of the changes has improved but only a third of those who have never received advice were aware of the need for higher qualifications, as opposed to half of those who have received financial advice. There was greater knowledge of the ban on commission though. A further finding is that most people in both categories learnt about the changes from newspapers and magazines with only 19% of ‘advised’ respondents being made aware by their adviser.
From the ‘unadvised’ cohort, half said they had no money to save or invest and a further 21 per cent preferred to ‘do it themselves’. This leaves around 30 per cent with money to save but either hadn’t thought about taking advice (the majority) or lacked trust in the financial services sector (7 per cent).
Focusing on this 30 per cent, just over a third said they might or would definitely consider advice in the light of the RDR changes, which equates to 5.3 million people in the UK. Now, we are not naïve enough to believe that all of these will do as they say but if just a small percentage is willing to take the first steps, there is an opportunity to grow your client bank.
However, looking at the research, we don’t appear to have been as good at communicating the RDR changes as well as we might have, so, if we want to convert the sceptics into clients we need to be more vocal about the changes but equally important, the benefits that professional advice can deliver.
Fay Goddard is chief executive of the Personal Finance Society