As we discussed MP expenses, it reminded us both of how nothing much changes here or in the UK as to the public perception of those in political office.
The news that Aifa is complaining that IFAP are ineffective in promoting the value of independent advice fails to recognise that the key individuals who should be promoting the IFA brand are IFAs themselves.
In reality, we are all guilty of failing to promote the “brand” but then is there any significant value left? I suspect that in a post-RDR world, the answer will be yes. For now, the problem remains of a generic-style title with a non-generic population. Currently IFAs could be at one of two extremes or anywhere along that path, either product pushers or fully fledged planners.
I have to say it seems a bit pointless to trigger such a spat, given that the next RDR publication is but weeks away. What really gets me going is that there is little if any publicity on key issues directed at the public. This extends to all areas of legislation and regulation.
As we get animated and sometimes even incensed, the general public and our clients among them remain oblivious to what goes on.
Take the retail distribution review or what is now the retail distribution implementation plan. Ask anyone who is not in the sector and they will be nonplussed. After all, many of them see the title of partner as the same as IFA and that is not lost on the multi-office that takes advantage of this ignorance.
The public needs convincing of the value of advice and it is the duty of all professional advisers to make this a reality by ensuring the equation of the impact of advice and the cost is fully handled in their recommendation or report.
Personal accounts is another issue that draws blank looks from finance and HR directors alike, yet they should have this increase in fixed costs in their five-year plan.
They also need to consider if it is easier and cheaper to set a scheme up for all staff. I suspect if we can help them see the costs of compliance and operation, taking the step now will be far more economic.
Pension age equalisation must also be looked at. Every time we put in a scheme, we talk about state pensions and the ignorance is palpable regarding the move towards women retiring at the age of 65 and all of us soon having to wait until 70.
Many people still believe they can take state benefits at 60, an abject failure of communication on behalf of the Government .
When cash is not cash is another problem and I am not talking about a drop in standards here but referring to term investments, where clients need- ing income miss the fact that the income comes at the end and not during its currency.
We have even seen structured products recently being pushed by building societies who refer to them not as investment plans but as accounts – more obfuscation, there must by now be a degree in this kind of marketing “strategy”.
Risk – now this is where the regulator could have done so much but in fact has done little. The ABI and the IMA could also have played a more useful part but they seem overly focused on members rather than the public, but then is that not the key difference between a professional and a trade body?
Perhaps the answer to this lies with the educators helping the general public just as they have helped the sector itself.
Finance has been knocked off the front page by MP expenses of late and that means the job of keeping the public up to speed falls back to us. Let’s take up the challenge.
The conference I am attending kicked off with an address from Bob Woodward who, together with Carl Bernstein, broke the Watergate story. Since then he has written several books focusing on presidents and what impact their major decisions have had.
Perhaps his next book should be on Gordon Brown and how he has coped, or otherwise, with expenses-gate. That it was Brown who pushed for freedom of information is an irony underlining the fact that once power shifts, in this case to the public, any attempt to keep matters under wraps is doomed to failure.
Regular readers of the column know I am all in favour of transparency. Where this is promised but in reality is replaced by obfuscation – take Natwest’s free advice and Barclays’ low-risk investments – the outcome should be severe. Those seeking to gain advantage through another’s ignorance ought to be punishable by law. As they say in the US, we all need to keep it real.