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Keith Richards: We can’t ignore the advice gap any longer

It is in the public interest to seek a solution to the advice gap that has widened since the withdrawal of mass market advice.

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The advice gap in the UK is something that cannot continue to be ignored from a public interest perspective. Speaking at a Treasury Select Committee in early September, chief executive of the Financial Conduct Authority Martin Wheatley voiced his concern that individuals at the lower end of the spectrum are not getting the same service as those at the top due to the withdrawal of mass market advice post-Retail distribution review.


The industry has, of course, been raising this concern from as far back as the early 90’s. We have seen the advice gap in the UK continue to grow over the past 20 years and this is regrettably set to continue as further regulatory change continues to impact both the market and consumers in the wrong direction. It is therefore of even greater significance that Martin should make his views public and is a clear signal for the industry to respond constructively.

Clearly the exit of good advisers in the run up to the RDR has exacerbated the issue, although the fact that over 1,600 qualified advisers have re-entered the market since the start of the year is certainly more positive than predicted and has helped to temporarily mitigate the public impact. The fact that we have not seen the post-RDR fall-out of advisers struggling with adviser charging is testament to the quality of the individuals who remain and reflects the value existing clients place on advice.

Of course, some will pessimistically point out that further adviser fall-out should be expected; it’s just taking longer to materialise. While some further adviser loss for various reasons is likely, I do not share the view that it will be of significant scale, as long as certain aspects of unintended regulatory consequences are addressed. There were, of course, pessimistic predictions that adviser numbers would fall drastically with a widely forecast prediction of around 20,000 by the end of this year. However, with just over two months remaining and the current population standing at a more positive 32,500, this prediction has fortunately fallen wide of the mark.

The withdrawal of advice for the mass-market by the banking sector is where the biggest impact has been felt and this was clearly not originally anticipated when the RDR was first conceived. As intermediaries were expected to increase their focus on higher value clients, it was anticipated that the banks would help to bridge the social exclusion gap by building capacity through their branch networks. Bank adviser numbers have reduced by over half during the past 18 months, although a number will have moved to the intermediary sector.

Adviser feedback also suggests that few seem to have implemented radical segmentation strategies of their established client banks, limiting their services to clients with assets above a defined value, thus demonstrating that advisers in general do not put their own commercial considerations above the needs of their clients. And this is certainly a more positive consumer outcome than was otherwise feared – believing that advisers would dump clients wholesale.

It is widely accepted that this position is likely to evolve over time. Advisers are not turning their backs on existing clients with lower value assets to invest, despite the commercial impact, but consumers seeking advice for the first time is where some evidence of RDR impact has been more immediate and the consequences are therefore being more widely felt.



The increasing use of technology will naturally play its part in bridging access to products and services. But the need for professionally qualified advice has never been greater and it is in the public interest to seek a solution to the advice gap.

It is encouraging that both the regulator and Government have the long-term consequences of a growing savings and advice gap on their respective agendas. The RDR is a milestone opportunity to improve professional standards, increase trust and deliver better consumer outcomes – but without a thriving advice profession, the benefits are going to be limited to the affluent minority.

Keith Richards is chief executive of the Personal Finance Society

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Comments

There are 39 comments at the moment, we would love to hear your opinion too.

  1. Yet again the CEO of the PFS surprises. (Aren’t acronyms wunnerful!) The mass market was never advised – they were sold to. It amazes me that people don’t know the difference. They couldn’t afford advice pre RDR and they can’t now. Nothing has changed. It’s just that the new regulations make ‘selling’ instead of advising somewhat more difficult.

    Anyway what products are you referring to Mr Richards? (Selling always involves products). What is it that the mass market needs? Pensions – that’s taken care of with AE. Investments? Cash savings is not affected by the RDR and perhaps debt reduction is better for the mass market than an Insurance Bond. Life assurance? Well that still pays commission – so what’s the problem there?
    We are forever hearing about the so called advice gap – what in accurate reality is it?

  2. @Harry
    Good morning Harry. Once again I feel compelled to comment on your comments. The advice gap for people without any money or with very limited funds is largely irrelevant. So we probably agree on that part. Advice is not worth paying for if it cannot be acted upon. I cannot think of anyone who would think otherwise. However, the advice gap that has been exacerbated by parts of the RDR is the gap for people who want advice and are in a position to take it, but who need to spread the cost of that advice. And maybe advice IS the WRONG word. Maybe what some people need is an “advised transaction”.
    I find it strange that we seem to be trapped in our thinking by current legislation. It appears that those operating at the top end of financial advising think that unless advice is chartered, fee-based and that the cost is unrelated to the amount advised on then it must be “bad”.
    But that is a very blinkered view. It is like saying to a sole trader or a small limited company that the only good accountancy advice comes from a fully qualified chartered account. Surely it is a matter of having a regime where the level and cost of advice is tailored to the needs and means of the recipients. A bookkeeper is all that is needed for simple unsophisticated businesses since the cost of advice needs to be related to the level of resources and the complexity of the business. And if a small business is forced to pay for the “Full Monty” then it is questionable whether or not the value added would come anywhere close to matching the cost of that advice. So why not apply the common sense applied to accountancy services to that of regulated financial advice?
    And you do seem to have a real downer on selling. Selling is good when it is done well. Consultancy is advising people what they need based on their needs, resources and beliefs. GOOD selling is doing all of that but then motivating and inspiring someone to TAKE ACTION and BUY what they need. Without GOOD selling the world would not evolve, because it is only by GOOD selling that inventions become innovations. The “selling” you describe is flogging stuff not real selling.
    We can never close the advice gap for everybody, we live in a commercial world not an idealistic one. But surely it is not beyond the wit of Martin Wheatley and his team to allow a regulatory framework which does not insist that everyone should receive expensive sophisticated independent advice?
    When you cut your knee you need a first aider who knows how to dress a wound and apply a plaster rather than a private consultant surgeon. Let us look to develop a regulatory framework which enables first aid to be given.

  3. Agree with Harry, this is an organization that got into bed with the FSA on the RDR – in the main to benefit from exam fees.

    Now its seem this was a mistake as there are no longer any bank advisers??

    The mass market wants nothing to do with financial advisers, they where always sold to.

  4. Sorry Harry – I agree with Brian Gannon | 4 November 2013 10:52 am

    I believe the problem Harry is that you are a good adviser and a good salesman too, but the industry is loosing sight of the fact that someone with both skills is needed or TWO people whose skills combined achieves the same i.e. a good para planner supporting a good QUALIFIED salesperson.

    Without both skills in the mix we let our clients down by either selling crap products or recommending a technically excellent idea and then failing to deliver by “selling” the idea to the client so that they execute the advice.

  5. Adviser V Salesman ?

    Advice -: get paid whether the client takes advice or not ? get paid more if the client actually acts on the advice and recommendation (on going service charges or repeat business) if the client does not act on your advice or recommendation (assuming a product of some sort is recommended) very unlikely to come back (open to debate)

    Salesman -: exactly the bloody same !!!

    Most mass market operators, are salaried + bonus (I would suggest) the thing is now, we don’t have the enormous amount of “sales” pressure that was very evident 5, 10, 15 years ago ? (well I would like to think but probably be made to eat my words)

    Most IFA’s self employed – will charge regardless ( again I would hope)

    I don’t think there is an advice gap for those wanting to seek it ?

    I do think there is a huge advice gap when you come to look at the ever increasing dependence on the state and borrowing, in both cases this route is far easier and cheaper (in the first instance) than actually going to talk to some-one about it ?

    IE-: can I borrow 5k to go holiday or buy a new car ? Yes of course that will be an APR of 16.8% a year
    Or ?

    Can I save to get 5K yes or course you can ? that will cost you £750 pounds (or insert your own figures)please !!!!

  6. As a growing advice firm post RDR we have not turned our backs on any clients but I do agree that this may become more of a challenge for new clients as we continue to develop our client proposition and strategy. We have however, already taken a pragmatic approach by offering clients the choice to purchase protection and GI products via our website and may look to develop this further for simple investment needs, such as ISA’s.

    I agree with Keith that It is encouraging to see the FCA and government eventually acknowledge the advice gap impact and pleased that the PFS has highlighted it as a public interest issue, rather than an industry one.

    Regulation has been a necessary evil but it is now time to introduce some balance as suggested by the PFS.

  7. “There isn’t an advice GAP” is like saying there is no need to use soap or have a washing machine!

    Unless someone shows you what you’re not getting as a result of being smelly, you don’t realise you have a problem and there is a salesman who has that solution.

    Liquid soap, coal tar/carbolic or Swarfegga. Which is best? Depends on what you are trying to remove and whether research has subsequently found the product to be toxic (unbeknownst to the seller, but not the manufacturer).

  8. @ Paul Molyneux

    Sorry ! but the FCA and government don’t give a sH1t about any gap let alone acknowledge the fact, if they did they would have stopped this whole 2 billion + RDR experiment !!

    As for Mr Richards and the PFS they follow their own agenda depending on which way the wind blows strongest !!

    @ Phillip

    On a lighter note I live in a house with 1 wife and 2 daughters when I come out the bathroom I smell like a pox doctors clerk ! and I am starting to make my own po puri, I would like to smell more rugby than netball please !!!

  9. Negative commentating is not helpful and is unlikely to be taken seriously by the regulator! They will always do what they believe to be in the client’s best interest which should be at the heart of all of our businesses. It is fair to say that they do not always get it right but neither do we. Seeing recent comments from them regarding the advice gap makes it is clear to me that they are prepared to listen and act on it.
    It is important that we adopt a positive approach as they are far more likely to listen to us and take note rather than immediately think we are a hostile negative bunch only interested in our own futures.
    Let’s see some more balanced comments from successful advisers who have made the changes and agree with total transparency for their clients.

  10. @Brian
    “Advice is not worth paying for if it cannot be acted upon. I cannot think of anyone who would think otherwise”.

    As I have mentioned on several occasions it is evident that we inhabit different universes. You can act on advice without a product being involved. That is PURE advice. I can provide numerous examples of when I have provided advice for a fee and no product has been incepted. Just a very few examples:

    1. Equity release. So far I have advised every time that the client should avoid this like the plague. In the majority of cases thy have just dropped the idea, in others different means (non- product) have been used. EG Rent a room, or in one case renting out the house while occupants were on (long) holiday)
    2. Inheritance tax. Often the problem can be solved by (for example) expenditure out of income. Or just giving money away now.
    3. Investments. Sometimes a client risk profile is such that they just have to stay in cash.

    And so forth. So perhaps you need a little more imagination or just different clients.

  11. @Paul – both positive and negative comments are important in order to give a true picture. Negative comments without a suggested solution are not helpful. Many of us replied to the FSA’s discussion papers pre RDR and were pretty much ignored and what we said would come to pass HAS come to pass.

  12. @ Harry Katz | 4 November 2013 5:30 pm _ agree with yoru comments there
    1. I have the equity release qualification and yet cna count on 1 hand the number of products I have arranged and all those were BEFORE the qualification was mandatory
    2. I have the Long Term Care qualification and all the “products” I arranged I can again count on one hand and were BEFORE the qualification became mandatory.
    3. I advise on IHT planning and consider gifting and gifts first before we even consider using 2nd death plans (very rare)

  13. @harry
    Advice being acted on does not have to involve a product harry. We do inhabit different parts of the client wealth spectrum. And that is my point. Different strokes for different folks. Advice being taken means it is followed. Selling involves ideas not just products. But if you are dealing with clients who can make gifts out of normal income to solve IHT or who can just give money away now then what have such clients got to do with the debate about the advice gap? So I agree with your definition of advice not being product related at all times. But the lower the income or assets the less advice is needed and the more guidance and assisted purchase becomes relevant. And I don`t deal with this lower end of the market myself by the way. I just happen to believe that people deserve access to help rather than being lwft to their own devices.

  14. @Harry – Like Brian I rarely deal with people in the lower end of the market myself, but most of my clients have been those same people, it’s just their wealth has developed over time.
    Having looked Brian up on Linked in it appears our backgrounds are similar so our clients 20 years ago actually needed us to sell an idea to them as they knew nothing about the need nor the solution until we did.
    I rarely need to sell now as either I did the selling 20 years ago to the same client and they have bought in to the idea or an older adviser did the hard work for me and has since retired.
    I have no need for younger clients, nor to sell to them, but the industry does and so do my younger staff who are developing their skills but are not ready to advise yet. they need to build the relationships with their 20 year old peers who have no money whilst I advise them and help guide them ready to work together.
    I am just about to take on the graduate son of a family group where I originally advised the grandparents having inherited the clients from a retiring adviser. I don’t want or need the new client, nor will they be profitable in the short term, but the client needs me and their parents and grandparents have recognised that and in due course, they will hopefully work well and be advised by my staff rather than me.
    It’s succession planning i.e. having a future.

  15. Please, let’s put this argument regarding advice and sales to bed once and for all.

    As my old mate Dick Sprinkler used to post, the two may or may not be combined. It depends on the client.

    There are three scenarios,

    a) Client approaches adviser for advice on what to do regarding his overall financial situation

    b) Client approaches adviser about a specific matter he is aware of, e.g. his pension arrangements

    c) Client approaches adviser for advice on one matter and also obtains advice on a separate matter, e.g. wants a mortgage and also is advised to take out mortgage protection

    These three are all different but they inter-relate.

    In scenario 1 it is advice he wants. Scenario 2 it is specific to a product that he knows he/she needs. Scenario 3 is as in 2 but the adviser naturally combines mortgage advice with mortgage protection.

    The number of clients who approach me for a financial makeover, review or whatever name is currently trendy amounts to about 1% of my clientbank.

    We all sell and selling is not a bad thing if it is carried out ethically. Selling of a bad product is bad in the same way that inept advice is bad.

    In effect, it is all the same thing.

    Any by the way, Keith is correct. Sorry Harry,.

  16. @ Alan Lakey – What about the 4th Scenario?

    d) Client goes into bank to pay a cheque and ends up investing it all into a structured deposit for six years with little chance of a return?

    If this is the ‘advice gap’ we now have, then I for one believe we are better without it.

    Any time a client approaches an adviser they are seeking advice and not part of the advice gap. Ergo the advice gap must be people who do not know they need advice, which must include people who do not need advice. Therefore I dont see how anyone could generate how big the advice gap is and if its even relevant without detailed knowledge of these populations/ratios.

  17. @ Matthew

    Bless! It is often lonely being a sole voice. Thank you for your erudite contribution to sanity.

    At least there is now two of us singing from the same sheet.

  18. @Harry – Matthew’s comments make sense to me, were just singing the same hymn to a different tune you and I. 🙂

  19. What frequently makes these discussions so pointless is that in trying to score one over the other the matter at hand is mutated into something else.

    Selling is not bad, let’s get this straight.

    What is the difference between a bad sale and bad advice? It’s the same thing.

    If my client asks for a pension and I draw his attention to his virtually non-existent family protection and SELL him the problem and solution then that is better than some highbrow discussion about the pros and cons of VCT and UCIS.

    Something has been achieved which is beneficial. Forget the flim-flam and other nonsense, anybody who is trying to distinguish himself from other advisers by climbing the sharp pinnacle of being a holier than thou adviser is likely to get the point up his sare. Sorry, I’m dyslexic.

  20. @Alan
    That is precisely what I find so distasteful. So someone comes in to you for a pension. By all means point out that he is deficient in protection, but then leave it to him.
    This is why I disparage sales. You may have the best of intentions but this sort of thing just incenses me. This is not a crusade.

    As an example. I go to buy a new car and I decide I want a 3 litre turbocharged petrol engine in my sports car. The ‘salesman’ then tries to sell me a hybrid (or worse an electric car) as it is better for the environment. From my point of view guess what – I walk out. Sure he may mention it in passing but that’s as far as it should go – I want a petrol turbo. You guy wants a pension – he may decide to take some life cover, but it’s the pushing it that I find offensive.

  21. You are confused, Harry.

    Pointing out a problem and finding an affordable and sensible solution should be what all advisers do.

    Telling a client that it makes sense to protect his family and then letting waltz off happy with his £250 p.m. pension is not an option.

  22. @Harry

    I think you’re example is flawed. You’e probably closer to a pension v ISA with that example

    What i think Alan means that if a client comes to you for pension advice and during the course of the conversation you find out that he has a mortgage with no life cover and a young family are we not duty bound as financial advisers to suggest he protects the mortgage? I think we are. Should he initially state that he doesn’t want to cover his mortgage are we then to forget about it and write in the report “client doesn’t wish to discuss” or should we try to sell the benefits of taking the cover?

    I believe that our job is to educate clients in areas that a – they want advice in but have not experience i.e. pensions etc and b – that they did not know anything about but may be of benefit to them i.e. investments and protection. Once a client has been educated in both the pro’s and con’s and they then decide not to go ahead then fair enough. We’ve done our job and can sleep easy at night.

    How many clients have preconceptions of products, advisers or the financial services industry that with a bit of education can be changed? Quite a few i would hazard a quess at.

    Yes, a pushy salesman who highlights the pro’s and doesn’t mention the con’s is a bad thing. We all find pushy salesmen offensive, but a salesmen who educates and allows someone to come to an informed choice can benefit clients who didn’t know that they could be benefited.

    Just my humble opinion as usual.

  23. @ Nick

    I concede you have a point. My problem in this debate is I don’t have clients who are that stupid, so I guess I lack experience in this particular field.

  24. Harry get that chip off your shoulder – It is naive in the extreme to suggest that salesmanship is the route of all evil and distasteful – it is the lifeblood of every industry. Every successful businessman is a salesman the best sell without you even knowing you have been sold to.

    The latest trendy word ‘advice’ used in our industry misses the point whilst we have an advice gap we have an even bigger savings gap (sales gap if you like). The ‘Jonny cum Lately’ peddlers of ‘advice’ also miss the point entirely when chasing the HNW lump sums because they do not realise that much of what they are chasing has been built up over many years (sometimes in savings/pension plans of dubious merit) and are not grown on trees (little acorns and all that).

    Without sales (particularly mass market – hate that term) this industry is not sustainable.

    Its not as if the FSA/FCA were not warned about the effects of RDR and regulatory interference many years before that, so its a bit rich for them and others to be asking for solutions now.

    You might also say that as a salesman (adviser) of over 30 yrs with a large sustainable client bank what do I care – well I’ll tell you this industry is not sustainable long term without the little acorns – this industry like every other industry needs the lifeblood of sales and salesmanship lets get real (didnt the FCA bloke say that about RDR recently ?) and say it like it really is ! And to the ‘Jonny cum Lately’ who says the dimise of selling will stop bad advice/sales I will say there will ALWAYS be bad selling and bad advice its a fact of life in every walk of life – no amount of regulation will stop it. NO SELLING on the other hand means no industry.

    Finally thanks to my old mate Alan Lakey for referring to me – very touched !

  25. @Nick Wardle – spot on Nick spot on.
    @Harry – so given your stated views on NOT offering holistic advice (for that is the upshot of your post of 11.36am ) how can you be anything other than a restricted adviser? You have openly stated “So someone comes in to you for a pension. By all means point out that he is deficient in protection, but then leave it to him.” So where is the advice and consultation in just stating a fact and then leaving it to the client? If the client declines to accept advice then that is fine but to not even offer it shows an unwillingness on your part to be holistic. Fair play to you for being so honest about the advice gap for your clients.

  26. @Dick Sprinkler
    I agree wholeheartedly with your comments. Cannot believe that Harry was in a position where he represented IFAs given that he has such views about protection and sales. Surely Harry should represent the execution only part of the business?

  27. @Harry

    I once worked in bancassurance, you’d be surprised just how stupid some people can be when it comes to money.

    Thank you for the concession.

  28. @Harry – I’m glad you conceded Nick had a point and you lack experience in this particular field. I may never end up a multi millionaire, but I can sleep at night helping some of the people you lack experience of as I value the skills of the people and client I come across which may NOT be common sense but some of them have more by luck than judgment ended up well off.
    If I remember rightly even you Harry have found that some of the most stupid potential clients from a planning to stand on their own two feet perspective without state help are supposed intelligent people like Teachers and ex Teachers!
    No offence meant to teachers as just as there are similarities between men and women in all things, the trend for certain things will lean more in one direction and with Teachers it just seems to be one of the skills many of them lack.

  29. Boy Phil did you ever hit a target! I only have one teacher on the books and she thankfully is an exception. In all my 27 years in this business I have found certain occupational classes worse than others when it comes to any financial nous or common sense – and teachers are certainly among the worst. (As I said there are rare exceptions).

    Anyway to be perfectly honest in the main they are not in the income bracket that I service.

  30. In Harry’s defence here !! I happen to think he is right in his post of 11.36 !!

    Highlight the shortfall whatever it may be, if the CLIENT wants to move on, then move on !!

    The days of 3 objections then leave alone; have passed along with Noah and his Ark !!

    Our clients / consumer are not babies (as much as the FCA like to think so) and should be treated as such !!

    @ Brian I don’t think that has anything to do with him offering “holistic” financial advice ? I would presume Harry is? he is just not wasting his or the clients time bleating on about things of no interest to the client

  31. @DH who knows what Harry does other than him and his clients? However I do know what goes on with my clients. And if we are giving advice rather than selling stuff I cannot think why clients would resent a discussion (not a lecture) about protecting assets in the event of misfortune. I wonder if you are assuming that a discussion about protection has to result in the attempted sale of a protection product? That is certainly not my experience. It is more a question of having a rounded discussion about the threats to someone’s financial circumstances posed by death, disability, illness, redundancy, unexpected closure/failure of a business. These are all things which can impact just as adversely on financial wellbeing as can poor asset allocation or falling markets or inappropriate risk-taking. So quite how you jump to your extreme alternative of “3 objections then leave alone” I am not sure. I cannot see how limiting discussions to a pension or an ISA or a mortgage is anything much more than transactional analysis rather than financial planning advice. As previously stated elsewhere I do not see a problem in selling ideas, I have much more of a problem with “advisers” taking a position of superiority and then only addressing the expressed needs of their clients rather than helping them uncover their hidden needs too.

  32. @DH – agree with what you have said but not with what Harry was implying. You have to disturb the client enough and educate them enough to get a reaction sufficient to be able to close the door on a need they will not address, simply to cover your backside.
    With lengthy suitability reports rather than verbatim recordings of meetings, the system of closing doors can be abused however. Lloyds TSB/ Blackhorse from my personal experience of having unfortunately having worked for them for 18 months (big mistake, but learnt a lot) had very good sale training and a very good system for closing the door on areas the client expressed disinterest in. It was still open for abuse in 2010 when I queried advice a client had received from a LTSB adviser as the closed down doors were at odds with the known facts of her situation. Case went as far as the Ombudsman and unfortunately and incorrectly in my view, the client lost the case and it was not upheld. the ironic think is that the cost to LTSB of the case going to the FOS and the upheld payment that still had to be made for a smaller error was more than the client had asked for as they were more interest in an acceptance of fault, apology and LTSB looking seriously at their sales practices which in my opinion were flawed and open to abuse. I also believe it was a systemic issue hence why I supported the client in this for free in the hope LTSB would actually look to see if a trend existed which it did more than 10 years earlier when i worked there.

  33. I think we are getting there.

    Advice is sales and sales must be advice or else it is foot-in-the-door which nobody can justify.

    If my clients after a reasoned discussion refuse to protect themselves and their families than I tick that box on the factfind that says ‘thick’ and move on.

    However, the vast majority of clients do not resent such a discussion and whether this is ‘selling’ or ‘advising’ matters not one jot as long as it is carried out.

  34. @ Brian Gannon | 6 November 2013 4:04 pm – As you say, part of the review process can be explaining to a client that they have loads more life insurance than they need and nothing like enough illness protection OR as I have had happen on several occasion with clients in their late 50’s who are either new to me or before we used more visual systems of showing lifetime cashflow, I have had client’s who have after leaving my office phoned me back 4 days later and said thanks I’ve just resigned as I didn’t realise what income I needed in retirement nor that I’d already amassed what should be enough after making some balanced assumptions about the future and I’d like to spend a bit of an active retirement with my spouse now while I can still move! I had one poor chap who unfortunately died 2 years later, but at least he’d had two years of retirement out of his 40+ year working life when he died at 61 (he’d started work at 14) and as he’d gone in to draw down his wife got the lot! She’d rather have him back than the money she can’t spend in her lifetime now, but unfortunately I didn’t meet him in time to SHOW him he’d already hit his number!

  35. @Alan- I don’t just tick the box – I have the recording of them saying in their own words they don’t want to follow my advice or their priorities are different (it is for clients to priorize AFTER) we have identified their needs for them as rarely can they target all needs.

  36. I discern a trend. In one corner we have those who have been in this business their whole life (some even in bank assurance) and then in the blue corner we have those who have had wider experience in different fields.

    I guess we are all products of our experiences. When I first joined 27 years ago I wasn’t wildly impressed by the life offices or with the general practices. I haven’t had much cause to think differently now. I have spent my time trying to do things differently. I think I have managed to do that. Admittedly it doesn’t mean to imply mine is the right way – it just suits me. If others (and their clients) are comfortable with the way they work who am I to gainsay?

    It would seem I have a somewhat different client profile to the mainstream – no that doesn’t mean better (better educated maybe) just different.

    As long as our clients are happy and appreciate what we do one wonders what is the point in trying to score of each other?

    Going back to the original – I still don’t believe there is an advice gap and I’m afraid I have seen nothing to convince me otherwise. (Maybe it’s a case of “None so blind that will not see”). But I guess none of us on this forum is actually suffering from lack of business. So why agonise?

  37. @Harry – Q “But I guess none of us on this forum is actually suffering from lack of business. So why agonise?”
    Answer – It’s called ethics and signing up to an ethics code is now a mandatory requirement of membership of a professional body and whilst membership is not actually mandatory under FCA rules it is not easy to get an SPS without being a member and signing an ethical code, which makes signing an ethical code simply in order to be able to continue doing a job a bit of a farce.
    I am not suggesting you are not Ethical Harry, as you didn’t gain anything by standing and working for APFA.
    Just I suppose you’re sensible in only sweating over the things you can change and influence and which might benefit you. That’s what my wife always tells me, but if you don’t speak out (and no one can accuse you of not speaking out Harry, whether we agree on a subject or not having an opinion and speaking out is essential I think)
    Signing up to be gassed with CS Gas in practice and risk getting nuked with a battlefield tactical nuclear weapon or splattered with persistent nerve agent isn’t done for fun, but some of us whilst doing our day jobs committed to doing it for a large part of our early careers. It doesn’t have make you appreciate being dry and warm and having good food once you’ve been cold wet and tired with crap food for a while.
    Really must go home and see my wife and stop sweating the things I can’t change (or can I)

  38. Talking from a “mass market” perspective, the main issue is the removal of choice, post-RDR.

    It has been picked up that the removal of banks has been a major factor in the general advice field (having once been a technical specialist sorting out the mess caused by banking salesforces, I completely appreciate that this has certainly not been all bad!), however I am also concerned over what has happened to the offerings that remain in the reach of the hoi polloi.

    Promoted honestly and used properly, there is nothing wrong with the non-advised services that have largely replaced the advice available previously. However customers (which I feel is the most appropriate term for non-advised service recipients) usually believe they are receiving advice, as a result of the tactics being used in this market. Such providers must be responsible and make sure that the individual understands that they can browse and read (and even talk to “experts” if available) as much as they want but they must be left in no doubt that the choice (and responsibility) is entirely theirs. Additionally, the paradox that is undeclared commission on non-advised services (vs declared adviser charging for advice) means that customers are being tricked into thinking they are receiving a cheaper (or even free) service than advice. Force non-advised services declare their charges explicitly and the public will realise that advice is not so expensive, after all!

    Finally, no more cheap point scoring off each other. The public are often apathetic to the differences between the alternatives on offer and therefore we all get tarred with the same brush. Let’s make a concerted effort to promote the positives and talk about what we can do (especially when dealing with headline hunger media-types!). A more positive, professional impression will benefit all, regardless of whether you are HNW or mass-market!

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