I recently spotted a headline which asked if St James’s Place and Towry Law could be the “last of the independents”, given the current melee over definitions.
Putting to one side the fact that SJP is not an IFA, the question needs to be asked once more as to the value consumers associate with the term independent and whether it is worth many firms jumping through the regulator’s latest hoops to retain this title.
I once said that the perceived advantages of IFAs could come back to haunt them, for example, the ability to research the whole market.
This is just not practical every time you take on a new client and yet it is often cited as a core advantage.
As a firm, we dropped the IFA moniker a while ago as it did not align with what we are about, in that we only do what we are competent to do. Before you all rush to blog, think of all the firms near you displaying the Unbiased symbol that offer nowhere near a holistic proposition.
How happy would you be for potential clients to think of your firm in the same vein?I once said the problem with with-profits was it was a generic term for a non-generic range of products. The term IFA shares the same problem and that is why chartered financial planning firms have the edge.
On another related issue, recent changes on the Hargreaves Lansdown execution-only platform were announced by its head of advice. If that is not taking the proverbial, I do not know what is. I have no problem with execution-only, indeed, I think we could all deploy it to some extent, but I do have a problem when execution-only and advice are mixed or used interchangeably to promote a firm.
Having taken on many clients from execution-only platforms in the last few years, it is clear that without exception they all referred to the firm operating the platform as their previous adviser.
Let’s have simplicity – advice or no advice, all the other labels just lull people into a false sense of security.
If we are going to get the definition for independent right, we need to rename execution-only as “no advice” and clients should have to sign that they understand the protection they are opting out of by taking this route.
Creating a unique proposition is not easy. You may criticise Towry and/or SJP but the truth is both are highly effective marketing machines and are two of the few scaled advice propositions that are working.
As this is my last column before Christmas, may I wish you all a peaceful and re-energising Christmas break. We certainly deserve it.
Robert Reid is managing director of Syndaxi Chartered Financial Planners