It was a nasty old year for IFAs in 2003. The main culprits were PI and continuing negative investor sentiment. Some advisers struggled and hundreds quit while few matched the scale of profitability of three or four years ago. There were some big losses, although a huge number of intermediary businesses remain profitable.
But was it all bad? The regulator continued to get in everyone's hair but it is trying to change. There will be fewer consultations, said new chief executive John Tiner while chairman Callum McCarthy could well help resist the more foolish Treasury decisions.
All manner of initiatives continue their slow progress – Sandler, the menu, disclosure and training and competence.
The future of with-profits remains uncertain while fund managers, IFAs and insurers continue their manoeuvres over control of fund sales.
The protection market is confronted with all manner of challenges, not least the rising price for guaranteed premiums, but it remains likely that both protection and mortgage business will continue to provide bread-and-butter work for many firms.
No one is going to solve the PI crisis and precipice bonds could yet see some more high-profile IFAs fail. But there are some reasons to be cheerful. The markets are doing better and investors are gaining confidence. An interfering Chancellor has turned his attention to pensions so the need for advice is likely to soar. Professor Miles' meddling in mortgages will hopefully not damage the market. There are still investors prepared to back IFAs while big nationals may be turning the corner. Finally, there is no “killer” bank or direct proposition capable of stripping IFAs of their customers.
Our straw poll of IFAs this week suggests that most of you are more optimistic about next year. We hope and think you are right.