I am sure that ‘the powers that be’ at the FSA are pleased with their RDR project as it reaches fruition, wiping away what they perceived as malpractice in many quarters.
Sadly, this was only ever the case for a small number, not the majority.
I hope our profession will be enhanced by these changes, genuinely supported by our new regulator, the Financial Conduct Authority.
However, it has been a great opportunity to focus on working ‘on’ a business, rather than ‘in’ it. Segmentation and profitability should be in the minds of proactive business folk to ensure that their model is resilient against an economic backdrop of continued marginal or no existent growth for ‘UK Plc’.
I am sure the RDR initiative was conceived when the economic barometer offered a more sunny aspect but even if it was not, the implementation of the plans would have moved ahead regardless. In the big picture, are the changes that we experience a priority in comparison to the effects that our purchasing public will see?
Many pundits have argued that the public’s blinkers will come off and they will see the light – well the internet anyway – and piece together their own bespoke financial planning without the need for any real advice.
However, others may well shy away from the advice area and the gap between ‘the haves’ and ‘the have not’s’ may grow even further, which (if it occurs) I think is a real disappointment and my biggest concern of the overall process.
I think it may be this group, the ones that the changes were, at various points, designed to protect and encourage into money management that will be at loss. Going to see MAS, or ‘Ma’’, as the TV money advert puts it, is likely to have limited impact. Obviously, there are already some out there who can achieve this and they have never troubled our industry and never will. They will continue to gain and lose by their own hands.
However, many enquirers will realise that financial planning is a maze that needs to be negotiated with skill and the knowledge in all of its twists and turns to get the best for their hard-earned money.
By way of comparison, if you looked under the car bonnet of the modern car that delivered you to your current location, would you be able to do anything more than check the oil level or top the washer fluid up? Or if I asked you to draw up your own will or codicil and have the confidence to know that it stand the test of legal scrutiny, could you? This is why mechanics, solicitors, etc. exist.
This is where we as financial planners need to ‘stick to our knitting’ in ensuring that we offer the best quality financial planning to our existing clients and, as I anticipate, the increased client and enquirer activity in 2013 and beyond. Working on a transparent client agreed remuneration/fee basis will offer additional confidence to our enquiring public that what you see is what you get and I think that the overall prospects are promising for all parties involved.
2012 has been a good year to focus on business models, their offerings, their profitability and the way they are marketed. With many of my professional colleagues set for 2013 and beyond, I am delighted that we will be ready for the positive challenges that we face in bringing together the threads of our clients financial planning to create the positive outcomes they deserve.
Keith Churchouse is director of Chapters Financial Limited