John Scott & Partners Towry Law chief executive Andrew Fisher says he is no longer a lone voice calling for advice to be fee-based.
He praises the FSA for its bold threats of “stick over carrot” when it comes to new business churning for the sake of exploiting high commission offered by product providers.
Fisher says: “We were a bit of a lone voice out there on the fact that fees were the only way to go. Now the regulator has come out and indicated that commission might be phased out. It is nice to have someone like the FSA saying what we have been saying for years.”
JS&P bought Towry Law early last year and Fisher has been leading the integration of the two businesses. The process has not been straightforward, with Towry being a more traditional commission-led transactional business and JS&P focusing on fee-driven, holistic financial planning.
Fisher says: “Now we have one approach, one system and one management structure. It has been a lot of work but now it is a case of taking things forward. Now everyone is on the JS&P approach.”
He believes that many advice firms would be better moving to a different business model, with staff focusing purely on their specialism, whether it is relationship management or administration.
He says: “There are about 30,000 IFAs offering financial advice independent of the income of the clients. The first thing many of them have to do is realise that they are all incompetent at many aspects of it. But because they all like doing all of it, positioning themselves as self-sufficient. A lot of it is down to different pieces of someone’s ego.”
Fisher also expresses concern at the level of personal debt in the country. He says advisers need to ensure that they tell clients to pay down their debts before sorting out other aspects of their finances.
He says: “The Government is asking people to pump about 12m into savings schemes when most of the country is in debt. People in debt do not need financial advice. At the first session, I would tell someone to pay down their debt before doing anything else. This then allows financial advisers to focus on giving advice to those that need it – those with money.”