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On the menu

This year is just seven weeks old, yet there have already been five key consultations with a potentially significant impact on the future shape of retail financial services. At least two further, equally important papers are due out around April. Has there ever been an industry more reviewed and consulted upon?

My purpose in raising this is not just to have a moan about our workload, it is to say that we must all resist the temptation to lie back and let the flood of proposals engulf us as though IFAs had ceased to be controllers of their own destiny.

The future does not depend on what others propose – it depends on how we react to and take advantage of these changes.

Much has been and will continue to be written about CP166. Certainly, Aifa will be questioning some of the detail, not least because we want a post-polarisation world to be stable and not to contain the seeds of its own destruction, precipitating the sector into another round of costly change and review.

But it has to be said that the paper – unlike the unlamented CP121 – at least does not push advisory businesses into a preordained shape but allows each IFA to decide what category of adviser best suits his or her clients and business model.

The conditions for remaining an independent adviser are that the adviser must be able to offer wholeof-market advice (whether or not they use a panel) and that the option of remunerating advice by fee must be available for clients (whether or not they take it up).

In the more confused and fluid landscape of advice created by the proposals in CP166, there is one brand which could stand out above the surrounding tundra – independent advice. But it is for independent advisers, not regulators, to decide what IFAs make of this.

The vehicle for doing this could well be the menu. We still await the paper on this and it may well be April before we see it. But unless the FSA springs a nasty surprise, we expect that the menu will give the platform for businesses to spell out what they do for clients and how those services can be remunerated. We certainly hope that it will not get much more prescriptive than that.

To use the menu to best advantage, an IFA will have to be very clear about every aspect of the service on offer and why it represents such good value.

As I have said on numerous platforms, (speaking platforms, that is, I am quite safe at railway stations), now is not the time to hide your professional lights under a bushel but to set out exactly what your business offers its clients.

As an aside, I am surprised – in my capacity as client of an IFA – how little some advisers make of the admin which they undertake on behalf of the client. It is you on the phone to the call centre listening to Vivaldi, not me, and that is a valuable service in anyone&#39s book, especially where Vivaldi is concerned.

It is not just the value of what you do which matters. It is also the values by which you do it.

That also is for us, not the regulator, to articulate. We should be saying with confidence that anyone seeking independent advice can be assured that the adviser subordinates his or her interests to those of the client, that the business lives by its professionalism, that the adviser is interested in a long-term advisory relationship, not a short term product sell.

This is exactly what happens in many businesses. We must broadcast it with consistency and pride.


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