I am pleased that Nic Cicutti is continuing the debate in his column about the possible demise of the “old model adviser”.
The most significant comment that he made in last week’s piece was: “That’s why I don’t believe one business model is the salvation for the industry.” I could not agree more. One of the great strengths of the financial services sector has always been the diverse nature of the businesses that constitutes the market.
There are any number of different offerings and pricing models and the problem in my view is when one model is perceived as the only model worth considering.
A good example of this at the moment is the wrap model, with some providers and indeed some intermediaries suggesting that this is the only way in which value can be built into an intermediary business and good service delivered to clients. Clearly, this is not the case. There are many viable alternatives.
Even as a fee-charging adviser, I can still see the validity in the delivery of financial products to clients paid for through the commission system. It is simply that I do not believe that firms and individuals who deliver products this way should be called “advisers”.
It is in my view neither a case of right or wrong and definitely not the case that there is only one suitable way to satisfy the needs of the client. I am confident that both Nic and Peter Hargreaves will agree that what matters is that what was promised to the client is delivered and at a known price. We should always judge on the basis of value for money and not price alone.