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Pathway to the future

The PDF’S view

Pims is always an interesting conference and although delegates and suppliers (as I am called) enjoy the luxury of a first-rate cruise ship, the packed meeting schedule leaves little time to enjoy the facilities or even the views. In total I had face to face meetings with 44 individual delegates in just over two days.

Last year, the hot topic on Pims was still qualifications, especially raising awareness of the need for gap-filling. This year, the debate had moved on and delegates were much more interested in the detail of how VAT should be applied to adviser-charging, whether to new business or ongoing services.

The challenge of differentiating legacy business from post-RDR business was another discussion topic along with the more difficult question of “what must I do to ensure I remain independent?”

This shows a considerable shift in just under 12 months and demonstrates that advisory firms are looking at the practical aspects of running a profitable business after the RDR – and it is not as straightforward as some think.

Take a fee-based firm operating a commission-offsetting arrangement today. Will clients still be willing to pay the same fee if it means writing a cheque? If not, will the current fee structure be adaptable to advisercharging paid through a product. Will any change to how a firm charges have an impact on the need to register for VAT or where a financial product is involved is this always intermediation, and therefore exempt?

These are the type of questions that were raised with me and, as I am not in the business of consultancy, there was no way I could give definitive answers – even if I felt I knew them. But what was clear was that there is still much confusion and disagreement over VAT issues and the new requirements to be independent.

The PFS will be producing guidance on some of these topics and we are currently liaising with the FSA, Treasury, Department for Work and Pensions and HM Revenue & Customs on the above mentioned, plus other tax issues that will have an impact when advice is provided under the new regime.

Despite the uncertainties, I was very encouraged to hear how good business had been this year, with a significant number of financial planners saying it had been one of the best-ever starts to a year.

I was also pleased to witness the growing appetite for taking on new trainee advisers.

There was considerable interest in the Pathways programme that we will be launching later this year to help support firms and trainees manage the process from recruitment and training through to competent adviser and chartered status.

As a firm believer in “growing our own”, I hope that Pathways, which will be entirely free, will give more firms the confidence to take on some of the amazingly talented young (and not so young) people and develop the next generation of chartered financial planners.

Fay Goddard is chief executive of the Personal Finance Society


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