As the price of pasties continues to dominate political discussions, it makes me despair and wonder where people’s priorities lie at times. Then there are the petrol queues, which reminds me of a prank when I was in my final year at school. We were in the local supermarket and proceeded to fill to overflowing a trolley with bags of sugar. One shopper was intrigued enough to enquire why we needed so much sugar, we explained that a massive crop failure in the Caribbean had led to a world shortage of cane sugar. Without missing a beat, she grabbed six bags and soon the news spread virally and all the sugar was gone. As we emptied our trolley, the staff at the supermarket grabbed those bags for themselves.
Just imagine what it would be like if we could start a run on pensions, with people queuing outside advisers’ offices hoping that pension plans will last until they get to the counter. Perhaps scarcity is the answer to pensions and other saving issues.
As we head for the RDR, it is clear that some advisers will be off the road and will be full- time students in the fourth quarter. I wonder if the providers have factored that into their plans or are they sleepwalking? We have little time left and yet I still uncover people who are yet to add to their FPC, believing they can cram their way through. Some may be able to do this but, for most, this brinkmanship is ill-judged.
Far too many advisers and, worse still, several network chiefs, see the changes from the RDR as business as usual. Over the last month, I have been around the UK discussing the RDR and more recently the benefits that flow from cash-flow modelling. Many people are leaving their change to adviser-charging as late as possible, hanging on to a 3 per cent front-end charge as if their life depended on it or, more accurately as if their firm depended on it, which it probably does.
There is no doubt that the restricted option aligns with many who cling to the independent badge. The term IFA is no badge of quality and Aifa appears to be a busted flush, as will be any organisation that seeks to include the words independent and/or financial as its badge. It will soon find that few will rally to its call. What we need is professionalism, not spurious claims about a lack of bias especially as many continue to bundle charges, that is, no product sale, no payment.
Professionalism needs a high standard of ethics but I wonder how many really understand ethics. I recall some calling for an exam but if you test by exam it is no more than a snapshot and ethics is more about how you react to realistic scenarios as opposed to a set question. The major risk to ethical behaviour is similar to mental accounting, where debts and savings are segregated instead of being offset for a truer picture. The risk in justifying an approach either by seeing it as a common approach or where the “end justifies the means” is that it avoids the issue that needs focus.