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Independent view

Here we are just weeks away from the end of 2002 so I am reflecting on what business has been like and where we are going to next year.

It has been a difficult time for the industry following last year&#39s market and September 11, and ongoing concerns that a war is looming. I have talked to fellow IFAs over the course of the year and many are finding it hard to see any light at the end of the tunnel.

We have seen one problem after another. The worst market ever, the collapse of Enron and other financial concerns over accounting procedures. These, I am sure, most could cope with – and maybe with some support explore other business areas to keep the income flowing.

The main concerns are compliance, regulation and the outcome of the depolarisation saga and the worst scenario that it could bring.

Fortunately, the FSA has responded responsibly to the lobbying and despite the changes it is clear that IFAs can continue to trade without fear of turning fee-based in full and excluding many clients.

So we finish on a better note but that does not make up for the ground so many people have lost this. It is a shame the industry does not provide consultancy to businesses to help them develop their skills and their profitability.

Certainly there are courses and Zifa is one of the leaders of the training and development programmes on offer, but none that I am aware of could provide real business ideas and support through mentoring.

It could be invaluable to have a business assessment programme that could help focus on your practice, be it one or 10 advisers, and help steer you on a road to improve and expand your horizons.

There is so much talent out there but sometimes we all need support to get us out of a rut and up to the next level. There will no doubt be networks that offer some support in this area and I know that some tied operations have development managers in place. If a group of life and investment companies sponsored the development of a programme then surely it would benefit them with a stronger IFA relationship and increased business opportunities.

There are a lot of changes ahead. Already we are seeing the mergers of small IFAs and larger groups, all seeking strength in consolidation. For many the route which gives them an exit on retirement is the attractive option.

The company that appears to have a defined business plan and retirement structure/buyout is St James Place. I know that such organisations will benefit from IFAs leaving networks and those who want a real business partner with the support structure it can offer.

The prospect of giving up independence may be daunting but the reality is that you need to generate income through advising clients on financial planning needs. Your clients buy you before the product and solution. If you can find a company with good business solutions that is appealing to personal and business clients then you can only gain from such a relationship.

The other route is through business partnerships but maybe the sales nature of the industry blocks us from doing this. We are based in a Georgian market town and yet the solicitors that surround us are all partnerships, which enables pooling of specific skills and gives retiring partners a buyout sum with new partners buying into the business.

This is normal business practice and is logical for many reasons, including the profile of the company. It would improve the standing of advisers to be partners in their firm. This is one idea St James uses that gives it an image of professionalism and exclusivity to the client. The emphasis is on the partner being part of a highly professional group from the cream of the financial world.

Where are you going and what should you do to achieve your objectives? Look at your style of business and look at the weak spots. Can you delegate any areas to improve on others? Put together a game plan with timings and review it as the year rolls on, network with company contacts and fellow advisers. Whether you are tied or an IFA, exchanging ideas can be so valuable.

The next few months up to the budget could be bumper times if you hit the right market through capital investment and inheritance tax planning. Seminars can be a great way to generate client interest, but can you present?

Pool your resources, work as a group of IFAs and use the services of a good IHT office with an excellent speaker.

Wai Man Cheung is principal at WMC Investment Managers


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