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Forward thinking

Six months after depolarisation, apathy has struck the market. Many IFA firms have found ways around the rules to maintain their existing status and have not made proactive steps to improve their business structure to reflect the needs of clients better.

Those that have been proactive are already seeing positive results. Two of the bigger firms that have been associated with the IFP as they evolve their business have seen significant improvements in their bottom line.

Park Row and Grant Thornton, which now have over 30 certified financial planner professionals between them, have each improved productivity by over 20 per cent in the last year. Much of this is down to the commitment of the businesses to invest in their people and the business model.

There is an expectation that IFAs can move instantly from being businesses based on front-end commission to professional advice and service-based businesses but this will not happen.

Having been at the IFP for over six years, I have seen at first hand the difficulties faced by businesses in making the transition to this model. It takes several years to do so successfully. It is still easier to find reasons not to bother.

IFAs have to adopt a financial planning model to become successful and properly use the technology that is entering the market. Many of the 500 certified financial planner professionals have been struck by the opportunities that comprehensive financial planning provides. One of the lightbulb moments is working out how this service can be marketed to a client bank which values the breadth and depth of the output over a period of years.

Many still seem baffled by the concept of Treating Customers Fairly and other FSA initiatives. When you are led to believe that as many as 30 per cent of businesses are unable to reach a barely compliant level, there should be concerns over the quality of the processes applied by some businesses.

TCF is about having a properly set out way of dealing with clients. By embedding compliance into a financial planning process, firms are on the way to delivering this immediately. The challenge, as the IFP finds when testing for the CFP licence, is that individuals are able to communicate in a language and style that means something to a client. This stems from articulating the proposition and managing the client’s expectations from the first meeting through to the end of the relationship.

As a business, the IFP differentiates itself by focusing on the development of individuals up to and past the certified financial planner level. The other side of this proposition is supporting businesses to successfully make the transition to modern, profitable financial planning practices geared up to deal with today’s opportunities. The potential is enormous, just as soon as the market realises that comprehensive financial planning is the proposition that will enable professional businesses to move forward.

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