Ever since the title Independent Financial Adviser came into use, we have had change after change with the management consultants predicting the end for IFAs, only to find them prospering.
But now is not like the other times. After all the rhetoric, this is the real test for Aifa. If it fails to secure robust status disclosure when polarisation has long since gone, then one must question what purpose it has served other than to lose the IFA sector its best lobbyist – Garry Heath.
I did not always agree with Garry's approach but it is that kind of approach we need in the current environment. Subtle lobbying or pointless defending of the status quo simply allows the Treasury to get their wagons in a circle, as they have done with this partial reduction in polarisation for Isa/stakeholder pensions.
With polarisation on the way out, IFAs will only survive by asking themselves: “If my clients had plenty of time at their disposal and access to comprehensive information on investments, etc, what could I do for them that they cannot do for themselves?” Having given this matter some detailed thought, I have decided that my own area of weakness is investment strategy/asset allocation.
I would suggest that I am no way untypical. If we are honest with ourselves, why else are people under 40 in a with-profits investment. Is it their aversion to risk or the adviser's wish to play safe?
For independents to survive, we need to offer more than one of the many channels open to purchase packaged products. We must offer an alternative. To do this takes confidence, especially in the selection of investments and their ongoing management.
To remedy what I saw as gaps in my knowledge I decided to look at the education options available.
Should I attempt the AFPC examination course G70 Investment Portfolio Management or the Investment Management Certificate?
As many of my clients are at or close to retirement perhaps the new exams K10 or K20 could fit the bill. But having reviewed the syllabus I am convinced that, for most professional IFAs, these two exams will simply validate current knowledge levels and not expand it to the point where an IFA can obtain commercial benefit from passing another exam.
Collecting advanced exam passes without it producing a positive effect for the business is unlikely to push anyone to a pinnacle. Those examining bodies who ignore this will do so at their peril. Nonetheless, for the small IFA, an exam is the best value for money when filling in those gaps.
“Typical,” I hear you say, “your years at Sofa have made you an examination junkie.” Far from it – if anything, I feel the endless pursuit of technical knowledge misses the point that technical competence is necessary but it is communication skills that make the difference. Hence my opposition to examinations being compulsory in the retirement options market.
What should be compulsory is improved communications skills. As evidence, I can cite some really disconnected reasons-why letters sent to clients of one of my accountancy connections. Any connection between the letters and the client's circumstances were purely coincidental.
If we are to be future-proof, we need to control our costs, manage our time better and provide services clients recognise as adding true value. And we must underline these services at every opportunity.
So when you finish reading this, take five minutes to examine your services, determine the gaps and then do something about it.
Robert Reid is a director of Syndaxi Financial Planning