Good question. The answer is that there is no hard and fast rule. Often, the issue will be obvious. For example, when the retail distribution review was first published last year, it would have made no sense to ignore the topic in the week it came out.
At other times, something slightly offbeat strikes a chord and you find yourself writing about it, occasionally at the last minute and in place of something else you had already decided to comment on. On one or two very rare occasions, I have even ditched a column and replaced it with a totally different one.
Last week was a case in point. My comments ended up being about the Financial Ombudsman Service and mortgage complaints but originally I had started writing about a survey of IFAs from the technology support firm True Potential, published in Money Marketing a fortnight ago.
What made this research compelling was that it covered over 8,000 advisers from 1,357 firms, so its “accuracy” was hardly going to be in doubt.
I don’t know about you but whenever I read research about IFAs, a significant proportion of it is trite and obvious. So, for example, the fact that “nearly 80 per cent of adviser turnover still comes from initial commission, with only 5 per cent coming from fees”, did not exactly come as a big shock.
But it does paint a fairly damning picture of an industry which, despite its protestations, is still unable to grasp the nettle in terms of developing a compelling fee-based business model. No wonder the “client-based remuneration” option seems to be so keenly supported by so many IFAs.
But for me, probably the most damning part of the research was the admission by 43 per cent of IFAs that they operate no technology system at all or use their own spreadsheets and paper-based systems. According to True Potential’s survey, only 24 per cent of firms reconcile commission electronically.
It would be tempting to look at each of those survey results in isolation. So, for example, the reality that a significant proportion of advisers are like mice on a treadmill constantly chasing commission is regrettable, as is the strange fact that so many do not yet appear to know how to switch on their computers.
It is, however, the composite picture painted of IFAs by the survey which is troubling – and which also tells us a lot about other uncomfortable facts revealed in other surveys published in the past week or so.
As I write, we are coming to the end of the so-called Isa season. Under normal circumstances, most IFAs would expect to be coining it in. Yet, if surveys are to be believed, this year’s willingness to invest in an equity Isa is likely to be minimal.
According to the Association of Investment Companies in February, only 30 per cent of the general public were planning to use the total allowance compared with nearly three-quarters of professional investors. Indeed, consumers even seemed “unaware” of the stockmarket, with 24 per cent preferring cash Isas and only 2 per cent intending to invest in an equity Isa.
A similar survey by New Star, published last week, found that less than half of investors were intending to open an Isa ahead of the April 5 end of tax year deadline. Of those questioned, 62 per cent said they would miss out on their Isa allowance this year while only 38 per cent of investors said they were considering taking out an Isa.
Even among those who were considering an Isa investment, 44 per cent were considering a cash Isa and not an equity one.
New Star marketing director Richard Wilson professed to be gobsmacked by this choice, pointing out that over the past 20 years, equity-linked investments had massively outperformed cash.
Wilson said: “Long-term investors need to ask themselves this. If they look back in 20 years’ time, will they regret a missed opportunity? Above all else, this research highlights the need for investors to seek independent advice.”
He is, of course, right in terms of the lost oppor-tunities for long-term investors. In respect of what they should be doing next, his call for them to seek out an IFA is the complete opposite of what the research tells me. Coupled with what we saw from True Potential a fortnight or so ago, another reading would be that IFAs are fundamentally incapable of acting as financial educators and coaches.
Caught in the treadmill I referred to earlier, they are unable to command the confidence of many of their clients. The result is that as soon as markets take a turn for the worse, the majority of investors disappear.
The stark reality is that, based on True Potential’s survey, most IFAs have not even reached base camp when it comes to providing a professional service.
Maybe I should have said so last week. Then again, this week I wanted to write about Northern Rock and the FSA.
Nic Cicutti can be contacted at firstname.lastname@example.org