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Reid all about it

Congratulations to my fellow columnist Robert Reid who is about to become president of the Personal Finance Society. Having known and respected Robert for longer than I care to remember, I believe he will achieve his target of raising the profile of the PFS and will work hard to ensure the retail distribution review offers benefits to members.

But what is the PFS offering to guide its 24,000 members on the RDR? On its RDR website, under the title, How PFS can help, it mentions conferences, regional meetings, the website, RDR discussion paper summaries and surveys establishing member sentiment plus FAQs with online conferences and podcasts.

The PFS says it is uniquely placed, as a lobbying and campaigning organisation, to support consumer demands for reliable, professional advice. It also says it works with the regulator to represent its members’ interests, helping to shape the environment within which advice is given.

Current PFS president Carole Nicholls says the PFS “should lead from the front on the RDR”. Well, if it wants to lead from the front, it had best get a move on.

Aifa has consistently filled the trade press with its insights, technical explanations and sound bites on the RDR. In the second of Aifa’s RDR issue papers, many interesting points are made.

The gap in standards between certified and chartered financial planners is raising awareness of the difference in the standards of each. A case study, 152 credits and membership of the Institute of Financial Planning is deemed as sufficient for the new “gold standard” of professional financial planner. To obtain chartered status, the candidate needs a whopping 290 credits.

Consumers need to know the difference between certified and chartered. If you have not already chosen, which exam route would you go for? The RDR appears to have been written perfectly for Nick Cann and his IFP members. That is, if these qualification requirements are not seen as anti-competitive or thrown out by Brussels.

The PFS believes that “the prize for raising our game on professionalism is repairing our reputation and building trust with customers”. If I hear once more about “broken models” or “damaged reputations”, I will scream. Mutual trust is a shared belief that you can depend on each other to achieve a common purpose, particularly in perceived quality, brand reputation and satisfaction based on consumers’ knowledge and experiences followed by them being guided in their subsequent actions.

IFA Promotion research shows that around 90 per cent of consumers who visit an IFA are satisfied after their visit. Not many other industries can evidence consumer satisfaction results as high as this.

One of the ways to raise our game and build trust with consumers is to improve how we look after customers. According to TNS Finance, 80 per cent of people say the financial services industry must cut out investment product jargon and make things easier to understand. Around of 73 per cent call for the industry to give more personal one-to-one advice so advisers become more attuned to individual needs. More than 60 per cent say it is very important the industry provides more case studies of how clients have made money after taking financial advice.

This research reminds us that the level of consumer understanding of financial services is on average very low. I was talking with the parents of a friend and asked if they had considered investing in direct equities or funds. “What’s a fund?” they asked. So we can sit around debating the finer points of the RDR but until we put the consumer at the centre of the debate about the future of financial advice, the regulators could get this wrong.

Come on consumer organisations, shout out loud alongside Robert Reid and the other influential IFAs who still see clients regularly and let us hope our trade bodies speak ever louder.

Kim North ( is director of Technology and Technical


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