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Professional outlook

Being a professional involves more than just ticking boxes

Chris Smallwood IFA View

At last, it appears that stockmarkets have started to come out of their steep decline and early economic data appears to show that the UK will soon hopefully be climbing out of recession. With many predicting that the current very low interest rate climate could be here to stay, at least in the short term, the rush to safety which saw many investors returning to cash may also be coming to an end.

So, for those IFAs which are ready to offer professional business processes backed by robust systems, there is plenty of opportunity to win back clients’ trust, not just in the finance industry in general but more significantly in IFAs’ ability to add real value.

Making the grade as a professional and authoritative adviser firm will, however, take a great deal more than simply ticking boxes to get the right qualifications, diplomas or certificates. While the new RDR legislation may well force many firms to increase levels of training and quality stand-ards, there is in reality little point in making this invest-ment if the business fails to adopt and incorporate the same attitude towards professionalism throughout the whole business.

From a distribution perspective, the compound effects of the impact of the retail distribution review, changes to capital adequacy requirements and the cont-inued drive to embed treating customers fairly will see a sig-nificant burden on many distributors. This increase in costs and the lack of capital in some firms will also affect the ability for many firms to invest in technology, infrastructure and the required systems and processes to continue their business models.

Some of these firms are in a distressed state and some realise that if they are going to make changes – either putting themselves up for sale or just joining bigger firms – then now is a good time to invest-igate options before things worsen for them.

As we move to the world of adviser charging, where the cost of advice is agreed between the adviser and their client rather than through any intervention from a product provider, firms will need to invest considerable time and effort into reshaping their business and remuneration methods building a more sustainable income stream.

Whilst gaining the appropriate qualifications is obviously very important, the adviser business’s primary objective should remain to continue to design and build robust technol- ogy systems, valued regulatory and administrative services and an ongoing commitment to putting client’s needs first.

Chris Smallwood is chief executive of 2plan wealth management


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