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Rob Reid: We need a retirement revolution

You meet so many people in your life, especially when you hold a post in a professional body. It is so hard to remember them all but some do make an impression.

John Ellis, who was head of public affairs at the LIA, was one such individual, a man with integrity and a man of his word. It was great to work alongside someone who also had an independent mind and did not just go with the flow. I know I sometimes shocked him with my direct approach but then, as he once told me, that is why he trusted me as I did exactly what I said I would.

Last week, I attended a debate on client ownership and it became clear that a dictionary was needed by some. We heard from Andrew Fisher of Towry that it offered a “holistic” service.

Well, when I was writing copy for my own website, I avoided that very term due to the breadth of its definition. I decided that holistic advice was like comprehensive insurance-generic terms for decidedly non-generic offerings.

As all brandings become promotions by default, the regulator is going to have its work cut out in ensuring that labels are clear to the consumer as the RDR takes effect.

This takes me to the independent/ restricted debate; where the labels are the real issue as they tie the definition to products and not the overall service of which products are but a part.

I have never felt that the regulators got the whole idea of advice and what it provided. Thankfully, we do not have the ridiculous position of specialists being denied the independent banner. However, the position for discretionary managers is less clear and we find ourselves contemplating artificial and convoluted processes to maintain independent status. This cannot be the aim of these labels.

I have recently seen evidence of some providers managing to avoid adviser-charging issues that remain for IFAs. This is a topic for a future column but worth a mention as we consider the overly product-orientated regulation as a major factor in the changes proposed and the contradictions they have delivered.

I do not restrict my comments to the current batch of regulators. I go back as far as Fimbra and where the problem really took hold at the PIA – an organisation which seemed to contain no lateral thinkers. We then moved on to the FSA under Howard Davies and we seemed to turn a corner but soon we were back to products again. Indeed, I recall that some in the FSA tried to block me in the pro bono initiative and of all people Patricia Hewitt, the then Treasury economic secretary, came to the rescue and we proceeded. Sometimes, help comes from the most unexpected place.

We live in a country where savings are for rich people instead of being part of our culture and we need to emphasise advice before product to all. The debacle that is the Money Advice Service seems to have focused more on its own packages than on the job in hand.

Despite its title, it focuses too much on product and seems to struggle to reach its target market. All too often, these organisations focus on the messages they recognise and therefore end up talking to themselves, hardly the outcome we need at this time.

We don’t need evolution, we need revolution if we are to change the direction and mindset of people to make them realise that retirement can, and in many cases will, last a very long time, in some cases, even longer than the period they were at work.

We can help with this by ensuring that we promote the value of advice at every turn. The trade bodies, especially the Association of British Insurers, need to join in. I accept it represents the product manufacturers, but with detailed advice comes greater product sales and those products will tend to last longer too.

It is regrettable that there is no effective lobbying body for advice as Aifa remains ineffective for yet another year as the major firms try to reduce their subscription at time when they should really increase.

In closing, I should point out that although John Ellis passed away over a year ago, the PFS were only recently made aware of this. Nonetheless, I could not let the fact he had passed be overlooked by the masses, he changed me and he helped change an industry to an emerging profession, we all owe him a debt.

Robert Reid is managing director of Syndaxi Chartered Financial Planners

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. Good article Robert. However you say that saving is for the rich only and that being the case, if we cannot get people to save into products for themselves because they cant afford it, how are we going to get them to pay fees for our advice. If they cant see the value of saving how will they see the value of paying for advice that will lead to no action? Call me thick, am I missing something here? Maybe you mean we should only advise the rich. If so there will be thousands and thousands of advisers all trying to do business with a much smaller group of people and then our profession will be seen as fee hungry advisers trying to cut the tripe out of each other just to get turnover, never mind try to make a profit. I see this very quickly going to the stage of advisers saying to clients “Tell you what Mr rich client, if you end up not taking my advice there will be no fee. Hmmmmm let me think about this for a moment “No result for you means you dont pay.”…… Now where do I hear that meassage regularly? Oh yeah, on the telly or by text or by phone call three times a week. Whether its rich clients getting more and more advice for less money or middle income clients who wont save/cant pay for advice only we are all going to be royally scre*ed.

  2. Going to be royally scre*ed?

    We’ve all been getting royally scre*ed by the FSA and providers for years!

  3. man on the moon 14th June 2012 at 11:23 am

    Into a revisionist strategic advisory process myself with inherent added values for clients.

    The RDR is going to throw up a non level playing field. ‘Providers’ who have their own sales forces/advisors will make that happen alongside those passporting their non RDR compliant Advice into the UK.

    the RDR will apply to some and certainly not others.

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