View more on these topics

Martin Bamford: Advisers can’t keep outsiders on the outside

I often ponder to what extent we overcomplicate things as financial planners. A few years ago, I was pulled up sharply by a prospective client, midway through a pitch for our estate planning service.

“But I don’t have an estate,” they interjected. That service was swiftly renamed “inheritance tax planning”, with the desire to do what it says on the tin.

When I’m writing the show notes for my podcast each week, I’ll often catch myself relaxing into the use of technical terms. If we feel comfortable throwing around three-letter acronyms and technical jargon, it’s because we live and breathe this stuff. Our clients don’t.

I understand the temptation to live in a world of complexity. After investing countless hours in acquiring this advanced technical knowledge, through examinations and on-the-job experience, why dumb it down again?

There’s an argument that all professions create high barriers to entry, using jargon and customs to keep outsiders on the outside. Within retail financial services, add the FCA rulebook, massive Financial Services Compensation Scheme levies, capital adequacy requirements, huge professional indemnity insurance premiums and a multitude of other barriers. You can’t sit with us.

I do not doubt that the majority of the work we all do for our clients is of high value and extremely worthwhile. As we do this great work, we need to take care not to neglect the basics. At the end of last week, I got around to completing some household admin tasks. I hate doing these and, despite what the letters after my name might suggest, I’m not as committed to my own financial planning as that of my clients.

One of the long-overdue items on my task list was to review our home energy contract. The one-year fixed-term contract was about to expire and the current provider was proposing a hefty price rise. Five minutes later on a meerkat-inspired website and the job was done. Five minutes and £388 better off in 2019.

Convert that to an hourly rate and I need to give up both of my businesses, to devote my time entirely to finding more competitive gas and energy bills.

The exercise got me thinking about the annual wealth check agenda we work through with each of our clients, at least once a year. For some reason I can’t now understand, reviewing energy contracts isn’t currently on that agenda.

A super-complaint filed by Citizens Advice suggests consumers are suffering a £4bn-a-year “loyalty penalty” by not reviewing and switching a small number of household bills. That’s an average of £877 a year we could, as financial planners, save our clients.

At a time when clients are becoming increasingly sensitive to fees, surely making substantial savings like this, on top of the savings we make by recommending the most suitable investments and product wrappers, would engender greater loyalty.

Martin Bamford is managing director of Informed Choice

Recommended

6

Tony Mudd: Advisers are stifling protection innovation

The biggest reason new concepts are not being brought to market is a lack of confidence that advisers will change their behaviour. Having started life in the financial services industry as a clerk for one of the largest life assurance companies in the UK, protection has always been my first love. Unfortunately, it only takes […]

Tapering of annual allowance – adjusted and threshold income

The definitions of adjusted income and threshold income used to determine whether, and to what extent, someone’s annual allowance will be reduced can be confusing.  Here we try to make sense of it all. The annual allowance will be reduced for high income individuals from 6 April 2016.  Our previous article Tapering of annual allowance […]

Allianz Technology Trust

Walter Price, senior portfolio manager, Allianz Global Investors, discusses the aim and objective of the trust, how companies may benefit from cloud computing, why you should choose to invest in a technology fund and the potential implications of the Trump presidency.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There are 8 comments at the moment, we would love to hear your opinion too.

  1. Is recommending using a (supposedly) lower charge power company, researched through AutoSergei (with or without the fleas, covered by the FCA

  2. Martin, you’ve obviously been working as a restricted adviser but now you have expanded your ‘meerkat’ and can proudly say you’re truly independent… 😉

  3. Put the weekly shop on the agenda too ….

    Why shop at, Sainsbury’s… Aldi or Lidl are much better value

Leave a comment

Close

Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm

Email: customerservices@moneymarketing.com