The ability to embrace change seems to be a prerequisite for success in business these days. Perhaps that has always been the case but now it seems more pronounced.
IFAs who have read the Sandler review document on mediumand long-term savings will recognise the agenda for change set by the Treasury.
You do not have to be much of a conspiracy theorist to accept that the Government's view on IFAs is not particularly positive. Not only are we hell bent on increasing revenue at the expense of every other aspect of our business but we lack any real depth of knowledge as far as investments are concerned. Instead, we focus almost entirely on selling products with the highest up-front charges – and commission, of course – in order to save clients tax.
If this picture of the IFA is not the one you recognise, then, like me, you will have been surprised by many of the statements made and questions raised in the Sandler review document. So what are you going to do about it?
This consultation document will be no different from any other. While it might impact on 30,000-plus registered individuals representing more than 2,000 IFA firms, the chances are that fewer than 5 per cent of such firms will respond. Sure, Mr Angry IFA of Tunbridge will write letters to Money Marketing professing his outrage but the majority will remain silent. Many will leave it up to their trade bodies to respond but, for the vast majority, apathy will rule.
But silence on this occasion is not an option. There is a very real chance that this review will be the final nail in the coffin for a large number of IFA firms. Having faced up to the business issues associated with the 1 per cent world, all but the most robust organisations will be finished off.
Those which do not beat a path to multi-ties may well find that one non-negotiable aspect of remaining an IFA will be remuneration by fees only. If you feel I am overdramatising the situation, I suggest you spend some time reading the review document. It has definitely been composed by a person (possibly a group of people) who do not know what it is that you and I do. It has been put together by someone who has carried out the minimum amount of research before putting pen to paper.
However, if you are going to respond, might I make one suggestion? Keep the emotion out of your response. Make too strong an attack on the integrity of the review panel and you can be pretty certain that your response will be filed in the waste paper bin.
That said, there is plenty in the document to attack. Why is it necessary for the review to raise questions on the subject of with-profits funds when the FSA is currently doing a thorough job on this itself? Perhaps this is the classic case of the Treasury's right hand not knowing what its left hand is doing. Similarly, questions raised on the subject of IFA training in the Sandler review seem to repeat another FSA review of training and competence.
But my very favourite part of the review is where Sandler questions whether IFAs are focused on increasing revenue rather reducing costs. Do you honestly know of any business that is not simultaneously attempting to do both? I wonder if it has not yet been realised by the Treasury that most of us are in business to make a profit. If it really does want us to reduce costs, I can suggest a few starting points, most of which have to do with regulatory expense.
So, do us all a favour and read the review document. It is available from the Treasury website. Then think about a valid response to the questions raised and put pen to paper or perhaps fingers to keyboard. As well as sending your response to Sandler, can I also suggest that you copy it into this newspaper as well? It really would be good to know that plenty of other IFAs out there care about their future.
Tom Kean is compliance officer at The Analysts (Pensions & Investments)