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Reid all about it

As many people who know me will testify, I am seduced by gadgets. This Christmas was no exception.

I only remembered that my car lease was up when the company called to see if I wanted to keep the car. I have to declare that cars are not my burning passion, so going out to find a new one held little appeal. However, having been lost in Surrey one too many times, I decided that a satellite navigation system held a lot of appeal.

This basis of purchase is what used to be referred to as selling the sizzle and not the steak. It reminded me of what has gone wrong in our sector over the last few years, especially with complicated promises where the core objective becomes very obscure.

From this year forward, I believe we need to adopt the US habit of the elevator speech, where you have two minutes (the average time spent in an elevator in the US) to explain what the product or recommendation is all about. The benefit of this time restriction is that you cannot afford to be too complex in your choice of language if the message is not to be lost or still going on when the elevator doors opens.

This approach could equally be applied to the producers of booklets and brochures, who need to get their message across clearly without the luxury of small print. This will be particularly important when we come to the subject of status disclosure and the menu. We need punchy, clear text.

All too often, we assume that clients keep up to date with regulatory developments. When people contact us via IFA Promotion, we still forget to ram home the independent message, assuming that because they have used IFAP to reach us, they are sold on the IFA concept. We need to explain the importance of advice and that product purchase should follow the advice and not be in tandem or in front.

At a time when the public have lost confidence in endowments and final-salary pension schemes, we need to develop our soft skills to ensure that our alternative strategies are not built on sand. The headlong rush into the buy-to-let market is an example of the sheep mentality that has been fuelled by some personal finance sections of the press.

As the concept of asset allocation becomes more widely recognised, we need to ensure that our clients do not restrict themselves to investment products and include both property and investments in their own companies.

Holistic financial planning does not stop at the advice – it needs to be in a continuum which includes both product advice and investment strategy. If there is a break in the chain, we could find ourselves with clients who had the best of intentions but never quite complete the circle of planning successfully.

On Boxing Day, the satellite navigation system had its first real test when I found myself in a new housing estate with a numbering system which is totally illogical. I punched in the address and the voice politely told me that: “234 is directly behind you.” Given that it was the pantomime season, I had to trust that the system was not exhibiting a sense of humour.

Now, if only we could use the system to find those files we seem to mislay.

Robert Reid is a director of IFA Syndaxi


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