Ahead of his appearance at Money Marketing Interactive on 3 May, the former face of the FCA for advisers talks nightmare clients and scrapping the rulebook
Have advisers reached a point of true professionalism yet?
I think the professionalism of advisers has improved very significantly over the past five to 10 years. The professionalism of individuals is in a much better place. I think the next stage is for the sector to focus on how to improve professionalism at a firm level. There is more to having a professional firm than staffing it with professional people. Firms need to think and operate as a firm to be professional and I think there is more work for the sector in this respect.
This would include such issues as having a genuinely client-focused approach, having a coordinated client experience in terms of the physical documentation (client agreements, suitability reports and the like) and a range of services and investment solutions that have been designed with the target market in place.
How long will the defined benefit transfer market boom continue?
Years. Pension freedoms are popular and having direct access to your pension pot has a strong appeal. Couple that with hyperbolic discounting and underestimation of life expectancy and you have clients who do not adequately value the income stream the DB scheme provides. Even if (when) transfer values fall, these will be powerful motivators.
If you could scrap one piece of regulation, what would it be?
This may seem like a strange answer from an ex-regulator but I wouldn’t be averse to scrapping the whole rulebook with the exception of COBS 2.1.1 R. This rule states simply (and rather beautifully) that “a firm must act honestly, fairly and professionally in accordance with the best interests of its client”. This rule covers about 95 per cent of what advisers do on a day to day basis.
Who would be your perfect client, and who would be a nightmare one?
My perfect client is one who engages me for a tour of speaking events around the country – I particularly enjoy undertaking speaking tours. Once the subject matter is agreed they would need to give me free rein on the content (which, to be fair, all of them have).
My nightmare client would be one where they were trying to find ways around the FCA rules. This goes against the objective of my consultancy – supporting professionalism – and hence I would not take on this work. In fact, I say this on my website and have put it into practice when I declined to assist a claims management company.
Percival will chair the session on cashflow modelling at 4.10pm. To register your interest for Money Marketing Interactive, click here.