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Pete Matthew: FSA, please allow us to concentrate on clients


I wonder what we will all talk about when the RDR is finally in place? I foresee seminars and branch meetings filled with awkward silences and tumbleweed drifting across the meeting room floor. Then someone will announce that all advisers will have to be qualified to level six by 2017, everyone will take a deep breath and the cycle will begin again.

Until that time, I hope you will forgive me for adding my little bit of noise to the debate about the current implementation – shall we call it RDR1?

It drives me nuts that the regulator seems to have come full circle. For years, under principles-based regulation we have been told to implement robust, repeatable processes in our businesses. Apart from being sound business practice, it also helps us to ensure predictable outcomes for our customers.

But now we read that too many clients are being shoehorned into these robust, repeatable practices. We are told to ensure that clients can be advised off-panel or off-process to prevent this from happening.

What is the point of having a process which can be ignored some or all of the time? And how the hell are we supposed to document this non-process part of our process?

Ah well, there is at least one ray of light in the independent v restricted final guidance paper from the FSA. In paragraph 2.15, we are told that any justification for including or excluding a particular investment from our advice ‘needs to be centered on the client’.

The client, yes. I remember him or her. These are the people that we are all in business to serve, right? I wonder what they think about all this?

Actually, I know what they think and they could not give any less of a fig about our professional introspection. As we obsess about processes, qualifications and capital adequacy, they are worried about having too much month left at the end of their money or about whether or not their aging parents will need care.

Clients do not care about products. As long as their needs are met and their goals given a fighting chance of being achieved, they are happy and generally they do not care about the detail. This is clear from the worrying lack of interest from some clients when I obsess about the TER of a particular solution I am recommending. ‘Don’t worry about price, Pete – will it do the job?’

Clients don’t care about advisers, either. If they could go through life without ever setting foot in our offices they would. Our biggest threat has never been banks or direct sales forces, it is the internet. There are now online systems in the US that offer fully personalised financial plans, plus phone access to a certified financial planner adviser for a year, all for £250.

No one ever wakes up and decides to go see an adviser to sort out their financial lives. It takes some crisis or life event to trigger them, reluctantly, to pick up the phone to make an appointment. They just want their needs met and couldn’t care less about whether we are a financial adviser, a financial planner, a financial life planner, or multi-disciplined karmic money-guru.

So I am looking forward to the day when I can spend more of my time actually ensuring my clients’ needs are met rather than tweaking processes to please the regulator.

That’s what my clients want, and it turns out, that’s what I want too. Can I please just get on with it?

Pete Matthew is managing director of Jacksons Wealth Management and creator of


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There are 11 comments at the moment, we would love to hear your opinion too.

  1. Excellent blog Pete – Agree 100%

    Get ready for your FSA visit :0)

  2. Some hope ! Our aims are completely at odds with the regulator ! The regulator will always have something to prove – it needs to continuously justify its existence and can only do that with a rule book that grows ever thicker.

  3. from a stockbroking perspective I could not agree more. TCF stands for ‘ treating customers fairly ‘ – what should that really mean? What it should mean is that for every pound they invest through their advisor they get a proper return. All they care about is their advisor creating extra wealth for them – nothing else really matters. What is the point of treating customers so carefully that, together with the extra costs imposed on all of us, it leaves little ability to increase wealth. I challenge anyone to compare the performance of managed funds from the end of the Second World War to the end of the Eighties, to the performances since then – I think one will find performances are worse despite all the regulations and the clients are paying a darn sight more for them.

  4. Pete, what a brilliant article that summarises what every conscientious adviser thinks and believes, if only the powers that be remembered that it’s all about our clients and our relationships with them. I know for sure if clients were asked about our advice and if we strive to achieve their objectives as you put it -‘will it do the job’, 99% would say yes! Let’s hope we ‘can’ get on with what we do best and have a few years of client centric meetings rather than regulatory centric meetings!

  5. Ah yes, the client………… Now that would be a novel idea. Poor folk have been largely forgotten about in this rather costly and largely pointless navel gazing on an industrial scale. Centering your advice, time, resources and processes around the client and not the regulator, PI insurer and ambulance chaser would undoutedly ensure a better ‘consumer outcome’, they are paying for it after all.

  6. Jeremy Newbegin 1st August 2012 at 4:33 pm

    All you say Pete is true and an excellent article but……….

    Too many “Advisers” are taking advantage of the very clients you describe, and charging them extortionate amounts of money for a few hours work, finding some way to “hide” the true cost. The excuse of course is that those that do business with us pay for those that don’t. Hardly fair is it?

    Then of course you have the problem of how to deal with poor quality advice. Level Four and yes, level Six, is the FSA’s answer to this problem. I can understand their stance but I do agree with you that (my company) having put together an excellent investment process for my clients to then be told that I may be offering poor advice because I am “pigeon holing” solutions is so ridiculous.

    The outrageous outcome of RDR of course is that so many clients may well find that they can no longer afford financial advice. This can only mean that the rich getting richer and the poor poorer. I guess that is where on-line solutions may fill the gap but we all know that that will only work if clients acknowledge a financial planning problem. Those of us still at the coal face know that it is down to us to highlight shortfalls.

    Having started as a direct salesman back in 1979 I do sometimes wish for those times to come back, if only to give me more time to see clients, but I have to admit that much of my advice in those days was arguably not of the best. So, RDR will ensure better financial advice going forward but it will only be available to a few.

  7. @ Jeremy Newbegin

    Totally agree with you – we are of one mind in many ways!

    My frustration was with the seeming complete circle in the regulator’s desires. Are we principles-based or prescriptively regulated? In fairness, my own desires and the remit of the regulator are absolutely aligned: I want the best outcomes for my clients. I’d just like more time to get on with doing that instead of writing policies and statements which are only really for internal use or if the regulator comes knocking!

    I share your concern about the widening of the wealth gap and the potential for many people to lose access to advice post-RDR. I too was a direct sales guy and I mourn the loss of the IB insurance salesman. He may not have been perfect, but he got ordinary people saving for their future.

    Banks have mistreated their customers for far too long and are paying the price, well sort of, now.

    My throwaway comment about the internet being the biggest threat is, I believe, the answer to all this. People are turning online for their advice and information, and as you know I’m spending a great deal of time making sure I am there when they turn to the internet by producing content for This I do in my ‘own’ time because I want to give something back. Sounds sickeningly altruistic I know, but that’s how I roll.

    Thanks for your comment – hope you’re well!

  8. I couldnt have put it better !

  9. I am glad to see you still have a smile on your face Peter.

    I fear there will be loads to discuss next year, mainly how the FSA got it wrong while the industry stood by and let it happen! Sheep being herded into pens sounds appropriate!

  10. Pete, What a brilliant article. To the point and relevant. I couldn’t agree more.

    You are quite right clients don’t care about procedures and processeses. All they want is to be able to see or speak to us when needed.

    Unfortunately, time in front of clients has become a lesser part of our working week as we need time out to create evidence of policies and procedures that should be second nature when running a successful client focussed business.

  11. @Pete – Well said. Nuff said. 🙂

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