As we strive to develop more visible and workable ethical codes, the very individuals that should hold us to account for the general public exclude themselves from the process.
As the segmentation fan club grows, we must also recognise that it is necessary for some firms to service people other than the high-net-worth clients that seem to be the sole focus of many firms these days. Segmentation needs to work hand in glove with process and protocols if we are not to take one step forward and two back.
We need a solution for the mass market. After all, today’s savers will become tomorrow’s investors. If we cannot support those willing to save, we will start to shrink our potential market in the future.
The Government has a similar and somewhat unequal responsibility to stimulate the entrepren-eurial spirit for those in the accumulation phase while convincing the older segment of the population that the UK is the place to stay when you enter the decumulation phase.
The recent changes in tax and pensions sends the opposite signals. When the public then determine that the best place to benefit from CGT and benefit in kind taxation reduction is by being an MP, the unfairness of it all has a highly negative effect. We need to point the way to success, not give the public the equivalent of a defective GPS system.
Transparency in our sector may be uncomfortable for some but from the public’s perception, it is certainly the way to go. We need it in all matters, from advice charges to product design. When you have to break something to reveal its value the time spent on design has been wasted. That does not need to stifle innovation, it simply means that we need to take a less insular approach to our communications in this sector.
Having that level of awareness will help us build a much needed savings culture and avoid misselling accusations in the future. From the Government, we need a more inclusive approach to changes in the rules and regulations that impact on savings and pensions in particular.
The Speaker took a long time to spot the depth of the public’s distaste for his seeming wish to sweep all of the recently exposed information under the carpet. We cannot afford to take a similar approach when considering our reactions to the soon-to-be-released retail distribution review update. We need to embrace the change and to react positively to the changes that will bring us closer to becoming a new profession.
Dolphins are meant to be the smarter of the mammals and their inbuilt directional instincts keep them on course. We too need to stay on course, with our sector evolving into one that the public recognises and trusts. Its size may reduce but playing the numbers game and trying to hold things steady could be the very thing that erodes the public’s trust.
Robert Reid is principal of Syndaxi Financial Planning