All but those with the most entrenched views will see that the future landscape for advisers is looking very rosy as long as they embrace the change needed and can see the tremendous opportunities arising.
The alternatives to change look quite bleak. Some will look towards an exit strategy but, I suspect, in nothing like the numbers predicted by the gloomiest forecasts.
Few will find the alternative designation of restricted advice acceptable. How on earth would a current IFA tolerate that role and the disclosure which comes with it? Can you imagine the consumer reaction to both the oral and written statements proposed by the FSA: “I am an XYZ Ltd adviser offering restricted advice which means that my advice is restricted to advice on XYZ Ltd’s products only.”? It begs the question from the consumer, so where do I go to get proper advice?
The answer, of course, is to an independent adviser, so at a stroke the regulator has dealt with the problem that we all know has existed for some time and that is it gets rid of the pseudo-independent advice from the banks and others. As long, that is, as they enforce the rules and don’t go all soft on their implementation.
So, the independent adviser looking to change business model will need to set an agenda for change right now. The worst strategy will be to wait until the end of 2012 in the expectation that these proposals will be watered down. It may say consultation paper on the label but do not expect much in the way of change to the contents.
The independent adviser will need a compelling client-centric proposition which is probably client service-oriented and seen as valuable by the client. There will be a need for client segmentation so that appro-priate service levels can be delivered in a profitable manner to each client segment.
I suspect there will be an “unbundling” of the independent adviser offering, with financial planning dominating the starting point of the client relationship. Implementation of financial products will be seen as separate and distinct from advice. I dare to say that the implementation of financial products will become a less prominent role for the indep-endent adviser in the future.
How this is to be comm-unicated to existing and new clients will determine the marketing mix of the independent adviser firm. What is certain is that regular real time communication (via websites, blogs, tweeting and social networking) will become the communication method of choice for those advisers wanting to keep their clients up to date with a fast-moving and dynamic financial sector.
Martin Bamford is joint managing director of Informed Choice