When a friend of mine, a squadron leader in the Royal Air Force, called to tell me about a website called Friends Reunited which enables you to contact old school friends, I giggled quietly to myself and thought “what a nerdish idea”.
But paying the £5 joining fee was one of the best things that I have done in a long time. Why? For a start, I received my first Valentine's card in ages from someone other than my wife, online from the Friends Reunited website. But my initial joy was short-lived when I discovered the card was from my mate in the RAF.
Second, a reunion was arranged with a bunch of old schoolfriends, which was hilarious – some bald, some fat, all married with children and all with respectable professional vocations. Yet within half an hour we had all regressed to being kids again. They say that the brain is like a massive computer, storing vast amounts of information. It is quite scary what information was downloaded that night.
Why am I telling you this? Well, the third benefit of joining was that I met up with a schoolfriend who is an accountant with a firm in Nottingham. He has asked me for my help on a professional basis and our renewed relationship is going to be of real mutual benefit.
My point being? Well, financial advisers are an extremely resilient bunch of people and I know that things will work out for those of us that are honest, have integrity and genuinely care about our clients.
An old colleague of mine used to always say that he never knew where his next plan was coming from. Yet the next plan always appeared and he has always been one of the most successful financial advisers that I know.
We may not currently know what lies ahead – and I am not suggesting that you all go out and register with Friends Reunited. However, I am sure that we will adapt and prosper, in spite of a Government that seems to have no comprehension of the ethics and integrity within our profession.
I felt proud telling my old schoolfriends that I am an IFA and I will not tolerate any ill-informed halfwit who denounces our profession.
There is an awful lot of doom and gloom about at the moment, especially with regard to the proposed depolarisation regime. Changes will need to be made to the way we work but change always has been, and always will be, a constant.
What we can be certain of is that no one will ever take away the fact that we work in a people business. People buy on emotion and justify with logic and so they will always ask for, and need, our help.
We establish wonderful relationships with our clients, that is what we are great at doing. Just think of the many wonderful things that you have helped your clients achieve and just consider for a second how much they value your service. That will not change, nothing can take that away.
The proposed defined-payment system suggested by the FSA has its merits, although its format needs some severe tweaking. Many of us have used such a system for years, I regard myself as fee-based, although most of my clients still prefer to use the commission generated to pay their fees. The FSA needs to understand that clients should be given the choice of fees or commission. As long as we continue to operate with full disclosure of commission and fees, and as long as the remuneration is proportionate to our effort, that system will work.
I am not normally a betting man but I will wager the following – and I think I might win this one. If we keep doing what we are great at – cultivating relationships with clients – and if we continue to make our service vital to our clients, then we will prevail.
It is our responsibility to ensure clients understand the value of what we do, they must learn to appreciate how long tasks take and how much effort we put into their comprehensive financial planning.
Do not undersell yourselves – provide all your clients with details of all your time spent. You might only have had five hours in meetings with them but you might have spent another 15 hours putting together their strategy.
Once clients start to realise the amount of time and the level of expertise involved, then they will start to value your service even more. If they can perceive value, then they will be prepared to pay, whether it is through commission or fees.
Simon Welch is a senior adviser at the Lamensdorf Group