The advice market veteran turned consultant Malcolm Kerr gives his verdict on the ‘work in progress’ that is today’s financial planning profession, before offering his wisdom on how to take your firm to the next level at Money Marketing’s Interactive conference in London on 4 April.
What key reforms would help get people saving more?
Actually, people are already saving substantially more. About 13 million consumers, via auto-enrolment and the contribution rates are now becoming a bit more sensible
I think a flat rate of pensions tax relief and getting rid of all the complex regulations would also help
Sadly, I don’t think reform is the answer. I think many people will only take saving for a pension seriously when they have seen their parents and/or grandparents in poverty.
How important do you think coaching and life planning are to a modern advice business?
Very important. I can’t think of anyone other than a financial adviser that can add more value in this space. Clients need support in financial, physical and mental wellbeing and are willing to pay for it
It’s particularly important when clients are approaching retirement. They may have another thirty years ahead; almost a third of their life. Almost everyone in this space needs a life plan.
What should we be doing to get more new advisers into the profession?
I think we should encourage more mature entrants to enter it and suggest that advisers consider this segment. People who can afford to retire early are often looking for a chance to leverage their experience and will have empathy with clients approaching this significant event.
Maybe there are clients that might be interested in a second career. I think it works for St. James’s Place.
I know some firms have relationships with universities and other centres of post-school education. They have set up a system for interns to come and work during vacations and a track record of these interns becoming advisers in due course. A firm with young graduates as well as mature people advising would be interestingly diverse.
What one word or phrase do you think sums up the state of the financial planning profession today?
“Work in progress”. I think we are probably two thirds of the way to the financial planning sector becoming a profession. This is partly due to the fact that fees are often related to a transaction which creates a potential conflict of interest and professions avoid such conflicts wherever possible.
Another challenge is the ongoing problem of fraud and miss-selling by people who are not authorised. Advisers and providers need to invest significantly in changing consumer perceptions and the FCA need to be more pro-active