Are we really in the middle of a financial services boom in this country? That, at least, is a conclusion of a recent survey of our industry conducted by the CBI and PricewaterhouseCoopers. It seems profitability is on the up and we are hiring with a frenzy not seen since the late 1980s. No doubt, there will be those in Isis or Foreign & Colonial who will be relieved to know their skills are likely to be in such demand.
It feels like only yesterday that the efforts of Sir Richard Sykes to breathe new confidence into financial products was being heavily publicised. Yet, if this report is to be believed, people are queuing up to deliver business to banks, building societies, insurance companies and other financial institutions, helping to generate massive profits as a consequence. I don't know about you but, while conditions have improved markedly since the start of last year, it does not feel like a bed of roses to me.
But then my focus is on investment products – and tradeable financial assets at that. If your stock in trade is mortgages or even protection, then the boom in house prices will not have done your business any harm. Even buy to let appears to be maintaining its appeal so perhaps it is just fund managers that are having a tougher time of it. Consolidation in this part of the industry, which is clearly under way, will at least help maintain margins and help boost profitability.
Financial services is a broad church these days. A generation ago, less than half of us possessed a bank account. Today, you need custom-built wallets to hold all your credit cards. With a constituency that embraces mergers and acquisitions (vastly improved from last year if still behind the turn of the millennium activity), house purchases (already keeping a whole raft of people in gainful employment), consumer finance (a worry to the Bank of England but highly profitable to the institutions that provide it) and pensions (which may be in crisis but is still a vast and important sub-industry), financial services is not easily pigeonholed. Inevitably, not all components will be pulling in the same direction at the same time.
Since the consumer sets the agenda, there are definite signs that last year's model is not what will sell today – at least so far as investment products are concerned. Whether it is the fairly well-off DIY investor eschewing the stockmarket in favour of bricks and mortar or the sophisticated super-rich looking for asset classes with low performance correlation to reduce overall portfolio volatility, the need is now for investment solutions that deliver a degree of predictability. Investments, in other words, that will do what it says on the tin.
As for the adviser, the tighter regulatory environment in which we all now must operate may be dissuading some from doing little more than act as a go-between but at least it is balanced by a widening array of sophisticated methods of delivering answers to clients. But, as before, when great change presaged an industry shake-up, received opinion suggests that God is on the side of the big battalions. Popular belief is that the small firm will be unable to cope in the brave new world unfolding before us. I am not so sure.
In the end analysis, we work in a people business and people like doing business with people they like. The chemistry between client and adviser will remain an important component in the financial services business mix.
You will need, it is true, to be competent, well trained and knowledgeable of current developments in the investment world but be devoid of that magic spark which allows a potential investor to entrust their financial affairs to you and you should have picked a different occupation altogether. Being part of a mighty army of advisers tied into the best-resourced network in the land or operating as a one-person band will matter not a jot.
So, perhaps the survey is right to be upbeat. We are becoming wealthier as a nation. The need for advice is as great as it ever was and if some of the financial world's cylinders are not firing as smoothly as others, it does not mean the engine does not work.
Make no mistake, life is tougher than before but I am cheered by the thought that, despite indifferent publicity at times, evidence exists that our industry is prospering.