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Independent view

I have little doubt that the historic cottage industry of IFAs will have to change in order to survive. For too long we have enjoyed being in charge of our own businesses and we must look for new opportunities, either by grouping with other IFAs or by joining forces with bigger firms. The sum of the whole should be greater than the parts, as the phrase goes.

There should always be a place for the quality niche firms but far fewer in number than ever before. Margins, sharing of technical expertise, recruitment of staff and PI costs have made it impossible for IFA firms to stand still.

I understand that, in 2001, sole practices represented 41 per cent of law firms in England and Wales but only 8.1 per cent of practitioners. Sole practitioners accounted for a disproportionate number of indemnity claims. I am not suggesting that small IFAs can be thought of in the same way but it is interesting reading.

Successful IFAs know that to succeed they need to earn the respect of their clients. But the feeling of respect must be mutual, both between IFAs and their clients and also with other professionals. We gain that respect by extending client service and good manners, together with knowledge and fair charging for the advice provided.

Occasionally, we need to turn down a potential client, either because they want a cheap service, it is outside our field of expertise or because we do not feel comfortable with the client. Whatever our reason, we can grow increasingly selective, concentrating on the areas where we are able both to add value and also be profitable.

We may also need to take the view that a particular professional connection does not deserve an authorised third party link with our firm. Will they give the link the time it needs to develop fully, will they seek out appropriate clients, will they be open to training and will they respect our professional advice? The majority will but the rest will not get a second chance from most IFAs. They do not generally understand the time it takes to deal with related administrative queries, research and compliance, nor do they understand the costs of regulation and recruitment.

(For the record, I do not share Peter Hargreaves&#39 view of recruitment agencies. In fact, we have found several of them invaluable in finding staff. But there are always exceptions to the rule.) I cannot believe it is nearly Christmas. Where has the year gone? I am sounding middle-aged but 46 is far too young.

As IFAs, we can be Scrooges over the season, moaning about life and the future, or we can relish the excitement and the opportunities ahead. We must start our new year with confident anticipation.

Bah, humbug, I hear some of you groan. It is hard sometimes but we must be positive. There is heaps of good news for IFAs out there. The financial markets are slowly improving, more people are in the inheritance tax bracket, people are living longer, meaning that more need to meet high care fees, more parents and grandparents are opting to fund school fees, people are increasingly disenchanted with the NHS, people seeking client service are fed up with calls being answered abroad when they ring their local bank – the list goes on.

Call me cynical but think of all the opportunities for us IFAs to help in these situations and to build strong local and regional connections.

If I could make one wish for the new year, it would be that I only receive post that is private and confidential when it really is just that. Practically every envelope is thus marked and our administrative staff are unsure whether to open the Scottish Dunbar or Allied Life annual statement or leave it for the addressee.

One final (perhaps unpleasant) thought. With the increasing exhibitionist trend for removing clothes and posing for calendars, which financial services figures would feature on the Financial Services Calendar 2004? Take your pick from the field including Paul Smee, Stewart Ritchie, Brian Lawless and Peter Dornan (I believe I still have some photos of past Maidstone parties, Peter). Perhaps there should be some female figures, too.

Arnold Wills is a director of A Wills & Co

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