Much of the debate over RDR outcomes is whether more people will get access to advice. The proposals, as they exist, do not make this likely.
As organisations grapple with the evolving requirements, more businesses will be in a position to offer advice and technology will continue to develop to enable greater engagement.
The challenge is how we educate and engage with the consumer so they can be comfortable and able to trust the process to deliver a service that is relevant and appropriate for them and their needs.
The IFP’s national consumer awareness campaign Financial Planning Week (November 22-28) is gaining greater interest than ever this year. The consumer survey commissioned with NS&I and YouGov has thrown up some startling and worrying facts. Given this is the third year that Financial Planning Week has run in the UK, trends are evolving that need to be dealt with.
As Financial Planning Week launches, the Financial Planning Standard Board has released a white paper outlining the organisation’s position on regulation and oversight of the financial planning profession. The IFP is the UK affiliate of the FPSB.
The FPSB argues that professional financial planning bodies have a key role to play in regulation and oversight of financial planning and supp-orting governments to achieve their regulatory goals by relying on global best practices for financial planning regulation and certification. The paper suggests four tenets for effective financial planning oversight, including protecting the term “financial planner”, holding financial planners to a fiduciary standard of care, covering the use of financial planningrelated titles, and that oversight of financial planners should be undertaken by a professional financial planning body.
The IFP has long argued that more needs to be done to differentiate the discipline and delivery of financial planning. More direct engagement is needed with the consumer, as well as an education programme. Providers and services need to focus on consumer needs and engage with them to create a “wow” factor.
All planning needs to begin with analysis to work through what the future journey looks like and what is important, establishing a critical path and priorities.
Many people need to understand and manage their debt. Everyone needs to understand their budgets. The personal balance sheet is also important for a clear understanding of what they own and what they owe.
Don’t forget about protection. Making sure clients’ lives are not derailed financially by unforeseen circumstances is vital.
Having dealt with the other priorities, saving for the future is essential for goals and dreams to be achieved. Retirement provision should be at the top of everybody’s lists alongside other big lifetime events. Putting the plans into action is the start but regular reviews will ensure future success.
Clients who are already working with financial planners have identified they need professional help. They either have complex needs or do not have the time, knowledge or skill to take care of things themselves and are prepared to pay for this service. They understand what they are getting and value the service as it provides a clear direction for the future.
Nick Cann is chief executive of the Institute of Financial Planning