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Fay Goddard: Time for some to get a move on

Each year the PFS undertakes a member survey. It is important for us to know what members think about the services we provide and to understand the direction of travel of both individuals in their personal development and their businesses. This year’s results provided a valuable insight into a range of topics including RDR readiness, challenges and opportunities.

Let’s start with a positive message; 90 per cent of respondents felt they were RDR ready. Of the minority who are not ready, around half still need to complete gap-fill and the rest, either to complete the level 4 qualification or obtain an SPS. Eighty per cent of respondents considered their firms to be ready and outstanding matters were much as expected, with the majority of those who felt employers weren’t ready suggesting they needed to implement new service and cost disclosure documents and establish adviser charging models. If this statistic is representative, one in five firms needs to seriously get a move on.

For the rest of this article, I would like to concentrate on the direction that businesses are following. The survey revealed that 58 per cent were basing their advice charge for new recommendations on the value of the investment, a slight drop from previous surveys, with the alternatives being fixed rates at 23 per cent, hourly rates at 12 per cent and retainers at 6 per cent. Some 71 per cent intend to use fund based remuneration for ongoing services.

We also wanted to find out more about the type of business being undertaken so introduced some new investment related questions this year. Having listened to numerous debates on active versus passive funds, it was interesting to see that 50 per cent recommended only active funds, 44 per cent a balanced blend of both and just 6 per cent passive only. Almost half applicable respondents stated their firm offered model portfolios with a further 26 per cent offering the service through an outsourced facility. In contrast, 55 per cent offered clients discretionary investment services but the majority (42 oer cent) used outsourcers.

We also asked about threats and opportunities over the foreseeable future and unsurprisingly, 8 in 10 members felt that the cost of regulation and compliance was the biggest threat to the success of their business over the next 3-5 years. On a brighter note, there were a range of views relating to opportunities, with the top five being:

  • Fewer, more professional advisers
  • Higher professional standards
  • Referrals from professional connections
  • Greater transparency
  • Economic recovery

Looking at the top three, it is hugely encouraging to see that most members see the higher professional standards that many of you have worked so hard to achieve are now being viewed as a business opportunity. This philosophy should now be applied to CPD, which should be carefully selected to ensure your time is well spent and the output adds value to your businesses. Undertaking CPD simply to clock up the required hours it is a business expense, so plan your activities well.

Fay Goddard is chief executive of the Personal Finance Society

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Comments

There are 4 comments at the moment, we would love to hear your opinion too.

  1. I love it when people like this tell us to get a move on, what the blazes do they think we do all day.

    The RDR has been forced upon us, whether it is compatible with our business or not and predictions of massive consumer detriment abound, even from the mouths of the regulator.

    There is an old phrase which comes to mind “Marry in Haste, Repent at Liesure”

    Driving a car over a cliff edge is something most sensible people avoid, this regulator is driving the financial services industry over a cliff edge because it wants to save face, not because it is a sensible thing to do.

    What happens when the expected reduction in the availability of advice to the mass market disappears ?

    Do they say, we have to revisit this.

    Why should it be revisited when the consequences are abundantyl obvious.

    When people like this tell me to get a move on, I just go slower, I and many other IFAs march to the beat of a different drum, forcing someone to hurry up, usually results in mistakes being made.

    I also believe that the regulator in pursuing a course of action by threats and intimidation is acting in breach of the Equality Act, which forbids age discrimination.

    To Fay – you do what you want to do, I will go at my own pace as will many others.

    The only thing we do not have is a sensible approach to implementing RDR. It has been rushed through to be implemented prior to the FCA taking over from the FSA.

    The FSA has admitted draconian failings in its supervisory dealings with major banks, which has contributed to our recession, why should be trust them to implement RDR in such a wholesale discriminatory fashion.

    Threats and intimidation are the recourse of bullies.

    We need a regulator which works with the industry, not against it, the biggest threat to our businesses is at Canary Wharf.

  2. “I love it when people like this tell us to get a move on, what the blazes do they think we do all day.”

    Write hundreds of words on online blogs, it would seem.

    “It has been rushed through to be implemented prior to the FCA taking over from the FSA.”

    6 years. Rushed through?

  3. We were thinking exactly the same thing about you Fay. When exactly are you going to retire?

  4. Like it or not the “distant elephant” is in the front room….

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