Now seems to be the time for sweeping generalisations. From management consultants telling us that we are all doomed to Simon Chamberlain accusing some 30,000 of us being liars.
To be fair, while Chamberlain was extreme in his language there was at its core a serious message that far too many advisers have exaggerated their investment knowledge by indicating that they carried out extensive due diligence where in many cases they simply followed trends or worse still the herd.
Calling people liars is not the way to start an intelligent debate, many years ago a well know radio broadcaster, Jimmy Sanderson asked a caller to his phone-in if he was accusing him of mendacity. “Naw,” said the caller “I am saying you are a liar plain and simple!”
Sometimes the need to gain attention obscures the key objective and in the limited time we have left please store your egos and lets get on with the job in hand.
Despite extensive debate following the various FSA papers on risk and investment selection, far too many firms still allow their advisers to make their own decisions on investment selection. That is not an investment process unless the advisers hold the IMC or similar, nor does that approach allow the firm to assess the overall risk it carries in certain sectors that would allow them to take defensive action.
Now this solves the problem going forward but I wonder how many could evidence the way they operated in the past.
Reviewing past business will remain a key activity for the new regulator as it takes over from the FSA. A lot of the legacy issues revolve around choice i.e. too much choice and a key driver has been the self-employed status of the adviser.
The recent paper on incentives made it clear that it was not considering the banks in isolation and if the only determinant on the level of remuneration is volume of business then you have a problem.
Having deductions of a minimal level will not do, especially if they do not reflect the MI from robust feedback mechanisms.
My last column predicted the demise of adviser charging and I remain convinced that will be the final outcome. The recent news that Standard Life intends to write to all with profit policyholders demonstrates that its drive to develop its direct to consumer offering continues and this drive seems to have at its core client acquisition by stealth and not marketing.
Can I suggest that if its direct proposition is so good then it does not need to try and prise clients away from IFAs they should take their proposition to the market and let the market decide.
Its recent action with the SJP subsidiary over trail commission was followed by a targeted marketing campaign, so much for overall concern for client service, e.g. ‘we are concerned about you not getting service and really, really concerned if you have more than £100,000!
The issues over adviser charging and this latest provider approach to clients, makes direct billing highly appealing. In attacking and cross selling to your clients, Standard Life may have made the decision to direct bill all the more attractive.
There are also issues with adviser charging’s big cousin, consultancy charging.
The final nail in its coffin is the on-going issue around auto enrolment where consultancy charging educes contributions below the minimum level.
If you have not yet started to discuss fees with new and existing clients I would suggest you do so as soon as possible; detail is important but what is even more important is that you and your advisers are convinced that the proposition is worth the charges you intend to levy.
Robert Reid is managing director of Syndaxi Chartered Financial Planners