A long time ago, shortly after starting out on a national newspaper, I needed new angles from an adviser on a story I was writing. My boss suggested calling Justin Modray, then an adviser at Chase de Vere. I rang him and, true to form, he provided a mass of useful information for my article.
I was not the only journalist making use of Justin’s talents at the time. For a long while, a skim of national personal finance sections would see his name in print almost every week.
These symbiotic relationships are part and parcel of financial journalism. From our perspective, someone who understands deadline pressures and can drop everything to come up with fast, relevant and vividly expressed commentary is like gold dust.
For the adviser, the opportunity is that of building a business based on the unspoken – and highly optimistic – view of readers that if a person is being quoted approvingly in their daily read, then he or she must be reasonably kosher.
Justin understood the potential synergies of that journalist-adviser relationship better than most. It is a testament to his skills as a talented self-publicist (and I am not using this phrase in a derogatory way) that more than 20 years later he is still being quoted in the media on a regular basis.
Only last week, Money Marketing profiled Justin and his firm Candid Financial Advice, the business that grew out of his website Candid Money, following a claim that clients are paying advisers more than twice as much compared with 2012, when a ban on sales commission was introduced as part of the RDR.
Leave aside the factual basis for his claim, which is contested by some advisers. This time Justin is not working for someone else – as he was at Chase de Vere, RJ Temple and Bestinvest – but for himself. And as any self-publicist knows, it also helps in your dealings with journalists if the underlying business proposition your firm represents is one that includes core ethical values they and readers they write for also believe in.
Which is why Justin’s relentless campaigning about adviser charges increasing in the post-RDR world is important. It not only expresses his genuine sense of concern at this alleged turn of events, but is also beneficial to his own business model, which involves a proposition where charges are both prominently tapered depending on the size of a client’s portfolio but also lower than many of his rivals.
In that sense, Justin’s marketing approach is similar to that of another relentless, now-retired, campaigner – Hargreaves Lansdown’s Peter Hargreaves. Some advisers may recall it was Peter who married an unshakeable conviction that upfront indemnity commission was “unacceptable and obscene” with a business model that focused on the longer-term benefits of trail commission, as Hargreaves pulled in billions of punters’ money over the years.
Let me stress, my unease is not with the Hargreaves commercial model itself. Even with its imperfections, it has benefited many hundreds of thousands of investors and pension savers over the years. Nor do I have a problem with Candid Money’s charging structure as such: it is one of a number that can deliver better outcomes for consumers, assuming price is the single determinant factor in their overall financial needs.
The worry, originally with Peter and now with Justin, is two-fold: one is that, by default, you may inadvertently end up elevating what you do as the morally correct option for all advisers and their clients. In fairness to Candid Financial Advice, that is less of an issue.
While it’s easy to criticise some of the outcomes of the RDR, we need workable proposals on how to overcome them
The second is that, while it is easy to criticise one of the outcomes of the RDR – that many advisers have adjusted to it by making no modifications at all to their underlying client proposition on either charges or service – we need some workable proposals on how to overcome some of the problems identified by Justin.
For example, the fees table on his website is great on setting out Candid Financial Advice’s sliding scale of charges. It also tells me the level of service I can expect for my ongoing annual fee.
But we all know the time necessary to provide quality personal advice to resolve a client’s issues can be unquantifiable until you have assessed the need.
What we really need is two things. One is for advisers’ trade bodies, or even a comparison business like Unbiased, to collectively agree a set of two or three minimum service standards (bronze, silver, gold, anyone?) that clients might receive from their advisers.
The second is for the regulator to create a selection of financial issues that firms can clearly state how long they would take to resolve and then manage on an ongoing basis, as per the service standards outlined above.
A combination of the two, prominently displayed on all advisers’ websites and promotional literature, would give prospective clients a sense of what to expect and what to pay.
Advisers tempted to respond to Justin’s views by making snarky comments should instead think about how they can match and surpass the openness he demonstrates on Candid’s website. Surely that is the best response to criticism.
Nic Cicutti can be contacted at firstname.lastname@example.org