It is depressing to observe that, after establishing my IFA business for eight years, with a subsequent 12 years as an appointed representative of a big network, neither the public nor the Government retain any confidence in my business.
Irrespective of the raft of legislation regulating the financial services sector, this sentiment must have been enhanced by the implosion of leading companies, many staggering on the edge of bankruptcy with annual losses exceeding £2bn.
Not only are IFAs wary of recommending such companies but it also seems that their sole source of reference could be a call centre in India or, if they are lucky: “Hello, I'm Sharon, can I help you?”
With the introduction of the Financial Services Act, IFAs have supported and paid for an explosion of parasitic services that “guarantee” every conceivable benefit although these have rarely been realised and it is debatable whether the client has actually prospered.
Ken Davy has questioned the validity of the original style of network, which evolved from a cooperative to an all-powerful employer. He is right. Can one really entrust one's future livelihood to third parties consisting of Mr Jobsworth and Ms Tickbox, who are beholden to the profitability of their shareholders?
The stark realisation on retirement has been that the only really worthwhile financial planning has been one's property, state pension and final-salary pension.
Indeed, to be informed by financial companies that their legal departments are unable to authorise the transfer of renewal commission to your merged business on leaving a network raises significant questions.
It will be interesting to establish whether the Fraser Brown action in England and the Shoosmith action in Scotland will clarify the various issues at dispute.
There is no doubt that in the challenging financial times ahead, as IFAs introduce negative growth rates into financial planning, there will be extreme reluctance to place faith in our recommendations.
There would appear to be an even greater need for the cooperative pooling of resources to enhance competitiveness in an increasingly difficult marketplace. But to lose control to a third party which is governed solely by its own profitability and longevity must be a recipe for disaster. Be very wary of networks bearing gifts.
A De Fleury Principal, Financial Planning and Investment Services,Bath