Ahead of speaking at Money Marketing Interactive Harrogate on September 13, Red Circle Financial Planning director and cold-calling warrior Darren Cooke says it is urgent the industry trains young people to become advisers.
On a scale of 1 to 10, how optimistic are you about the advice market for 2018?
I’d say 8, activity for advice firms seems to be very high and in general we are moving towards firms and advisers delivering better financial planning and outcomes for clients but there are some clouds. The defined benefit transfer market still worries me; I don’t think the British Steel Pension Scheme fiasco was the last we will hear about, particularly on rogue advisers selling dodgy investments.
What is the best innovation you’ve seen recently?
I can’t think of anything genuinely ground breaking and new. There is a lot of re-inventing or repackaging the wheel going on but little that is truly new.
What can be done to improve the supply of advice?
We need to train more advisers, simple as that. How we do that is the million dollar question. In my day the big insurance companies and banks served the mass market and trained new advisers but they largely don’t do that now, and the time to qualify and costs, are far higher. That’s a good thing but it does make it more difficult to fund new blood into the profession.
Have advisers reached a point of true professionalism yet?
No, but we are a long way forwards from where we were 10 years ago and the direction and pace of travel is good. We will get there as more embrace financial planning and stop just selling a product or fund.
How long will the DB transfer market boom continue?
As long as transfer values remain higher, that makes it more tempting to transfer and makes the likelyhood of a positive recommendation to transfer higher too. While any transfer should be based on the client’s circumstances and not just the critical yield it is harder to justify a recommendation to transfer with a high critical yield figure.
That is unless the professional indemnity market decides the matter for us. Many firms are struggling to get cover or are paying much increased premiums for it so they may be forced to withdraw from the DB market altogether.
What major trends are you predicting for the next 12 months?
It will be interesting to see how the contingent charging debate plays out and the FCA’s look on both platforms and investment management costs.
What session are you looking forward to most at MMI?
A fair few but the one directly after mine on platforms should be lively with some excellent panellists.
How important is it for the advice community to share best practice?
Vital. We can all improve and learn from each other. Not one firm I know is perfect and the best acknowledge that as they constantly strive to get better and give better to their clients.
How can advisers best improve their image with the public?
Continuing to build professionalism, continuing to give great client outcomes and rooting out the poor advice and by distancing ourselves from the unregulated scammers the press all too often term ‘financial advisers’ when they are not – they are crooks.
What’s been your proudest achievement at your firm this year?
The success of the business means I get to spend my time how I want with my family and distribute some of the business profits locally. Earlier this year the local Gala committee needed funds to pay for a stage at an event as the local parish council had pulled funding. Being able to contribute funds towards that gave me enormous personal wellbeing.
If you could scrap one piece of regulation, what would it be?
I can think of a fair few I’d introduce or amend. The Mifid II regulations spring to mind. Right ideas, right intentions but so badly executed and they could have been so much better.
Who is your advice market hero?
There are a fair few I look up to but I’m not sure I’d call them heroes. Generally they are advisers who I admire for the way they run their business and the service they deliver to clients. I strive to learn from them and adopt some of their practice in my own business.
Will ad valorem charging stand up to recent criticism?
That would be telling – you will have to come to my session on the day to find out what I think about charging.
What’s your favourite tech tool?
For cashflow planning, I use CashCalc. The clarity it dives to clients is phenomenal. I have never yet had a client say it was a waste of time, in fact just the opposite, even from some that are sceptical at the start of the process.
Who would be your perfect client, and who would be a nightmare one?
Nightmare is one who doesn’t listen. There is little point coming to me for advice and then not acting on it.
Perfect is a client where I can really make a difference to them with good sound financial planning and advice and they are prepared for a long lasting collaborative relationship on their finances.
Cooke is speaking at the event’s panel discussion on how to decide fee structure when giving advice. Register your interest for Money Marketing Interactive Harrogate here.