Inspiring Trust was the theme of the IFP’s annual conference which took place at Celtic Manor in Wales last week.
This was an opportunity for the leaders in the financial planning profession from the UK, Ireland, USA and Australia to gather to consider the more positive aspects of life after the RDR.
The challenge for many advisers is not only to meet the regulator’s criteria but to survive in business thereafter. With an economy that’s sluggish at best, the burden of regulation, training, hiring and retaining the right people puts greater pressure on generating revenue to outweigh the costs
There is, however, a more positive side to focus on and a real opportunity to create and further develop world class financial planning businesses in the UK.
There were many excellent presentations at the conference. Manyaddressed the softer side of financial planning and behavioural finance, reflecting the need for good communication skills and building trust with the client for any successful business.
Delivering a service that clients love, will happily pay for and talk to their friends and colleagues about is the ideal outcome. Research tells us that greater trust will deliver better outcomes for the client as well as the financial planning business.
Active engagement as a result of this enhanced trust will lead to more of the client’s assets being under advice and a higher number of referrals. This will improve the quality of business coming into the firm and increase the revenue generated.
It is a massive step for advisers to shift their focus from products to a comprehensive financial planning service which includes the ability to use cash flow modelling and integrates the role of paraplanner into a very well qualified team. It will involve cultural change and a massive upheaval to an existing business. Appropriate training is essential and CPD needs to be built around personal development plans that extend well beyond level four requirements.
Understanding consumer behaviour is crucial to how advisers evolve their services, including adopting a social media strategy and an increased understanding of client preferences. Few advisers have really capitalised upon the lessons that we are learning from the thought leaders in this area. This understanding flows into how we deal with the whole subject of risk and enables advisers to work with clients outside of the parameters that have historically existed.
We must ensure that business is fully compliant, particularly the area of product recommendation. However, doing the right thing, rather than just meet the regulatory requirements, is a much more certain way for financial services companies serve their customers.
Accredited financial planning firms are able to evidence by the very nature of their service and supporting business, that this is at the heart of their thinking. Codes of conduct that are actively adhered to rather than gather dust must be one of the positive outcomes that we strive for.
Many delegates left our conference inspired if their feedback forms and the world of twitter is to be believed.
The hope is that this positive energy will rub off on those who are still despondently trudging on towards 2013 with no firm evidence that they are part of a business that is going to be around at the end of next year.
There is an incredible support infrastructure around and if worried advisers take action now to grasp it, a positive outcome is far more likely to be achieved.
Nick Cann is chief executive of the Institute of Financial Planning