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Nick Cann: Inspire trust to benefit after the RDR

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

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Comments

There are 4 comments at the moment, we would love to hear your opinion too.

  1. Do you know, it never really sits well with me when people from a non customer facing environment tell me that I need to shape up and embrace change!

    Of course they are right, but there are those that talk and those that do and I would sooner hear it from someone who is nearer the consumer and really ‘gets’ our role and how the changes are to be perceived by Joe Client!

  2. What the f+ck does he know about it. Does anybody actually give a monkeys ?

    More importantly, its stating the bloody obvious what does he think we do kick the client in the b+llocks before throwing him through the window and nicking his wallet ? Wouldnt last long would we ?

    Client intereaction has absolutely nothing to do with qualifications, fees or any other new model adviser dog doings but everything to do with trust – that is something earned regardless of RDR.

    Ultimately the majority of clients deal with people they trust and understand not exams or smartarse wealth managers and it certainly has nothing to do with how or how much advisers get paid. Although as I have said many times before – I dont care how advisers make their living as long as those same smartarses dont tell me (or my clients) how to make mine !! Markets decide successful business models NOT regulators.

    2013 will be a watershed – wakey wakey about lets say September maybe even before then with abit of luck !!

  3. “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”
    Yep somebody is making lots of money!

  4. I agree with a number of the comments re points of view from non client facing persons.

    that said the IFP has been doing a lot of work on helping members consider the practical implications of RDR.

    Such as, how to explain an advisors role and benefits to a client and what they will pay for.

    Not shoddy as no-one else is assisting advisors on this.

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