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Sitting targets

RDR may seem a long way off to some advisers but with only three sittings a year to pass the requisite exams, it would be wise to act now and embrace

What is dangerous is not to evolve, said CEO Jeff Bezos. When we set up the J P Morgan Asset Management Academy in 2005, we wanted it to prove itself valuable to our clients, for mutual benefit. Four years on, with approximate UK audience numbers to date of 12,500, frequent presentations across Europe, the US and Asia and client demand as high as ever, we have proved that success is not about pushing funds (it probably never was).

We were seeking a working relationship that talked trustworthiness and professionalism as well as the crucial soft skills to make it happen. The academy now comprises over 20 presentations designed to enhance professionalism and relationship management skills.

We still explore insights into the industry, markets, products and business evolution but, most importantly of all, knowledge alone is not enough. What counts is the ability to take something complex and make it simple for clients without misleading anyone in a clear and memorable way.

Then along came Callum McCarthy, chairman of the FSA, at Gleneagles in September 2006. He said: “Incentives matter. They change behaviour.” The rules of the game were changing and the upshot for us was clear – advisers would need assistance more than ever before to navigate a successful route through changing regulation.

Let’s jump forward to April this year. We teamed up with the Personal Finance Society and offered a one-day J06 revision academy presentation. No one was more surprised than us when 163 people atten-ded, with a dropout rate of less than 10 per cent on the day. Of all the challenges set by the RDR and its implementation, passing exams and becoming qualified to the minimum required standard seemed one of the most important areas to address in the near term.

“Incentives are the cornerstone of modern life” wrote Steven D.Levitt and Stephen J.Dubner in Freakonomics, 2005. Incentives matter, especially when they are binary – no professional qualifications, no business.

Many practitioners still seem to think they have plenty of time to go. With only three exam sittings a year between now and the end of 2012, we have nine chances to take and pass the requisite exams. Check out the CII pass rates. We are not trying to scare anyone here but a lot of people might need all those sittings.

With our J06 presentation, we have stuck to a key principle for all academy presentations, that of practicality and pragmatism. Most advisers know enough and have sufficient experience to pass the exam but may lack the preparation and the exam technique to do so. This is a key skill and most of us facing exams need to give it some attention. The best moments for our clients over the past year’s 15 J06 presentations have not been in trying to guess whether there will be a question on CAPM or not or how easily we might remember the drawbacks of efficient market hypothesis.

What counts is the ability to take something complex and make it simple for clients

Rather, it is that fantastic moment when people get it. We break it down into non-jargon description and suddenly people are enthused again. Not about the exam perhaps but about the fact that as a result of this change, this regulatory catalyst, they are better prepared to explain a market- neutral strategy or shorting the next time a client asks about it. And the client undoubtedly will ask about it, given the past two years.

More J06 academy presentations are planned for 2010 and we are exploring the opportunity to present on AF4. Advisers have said in their feedback that it is not just about passing exams and we are proud of that. We believe, too, in the continuous application of the knowledge and so our seminars are backed by a quarterly guide to the markets seminars presented by Tom Elliott.

There have been and continue to be many useful presentations about RDR and its implementation, particularly where presenters seek to provide a synopsis of how it can be used to implement change. It’s not just about the RDR content but about how we react or change to take advantage of it. As well as our academy presentations, we have integrated our Adviser Insight series with the academy material to explore practical ideas about business efficiency and rest-ructuring in the light of RDR.

After the popularity of our research-led reports including Surviving the Storm, Putting TCF at the Heart of the Advisory Process and Outsmart the Recession, our records were broken with over 7,000 downloads of Reaping Rewards, our piece about recognising and releasing value within advisory businesses.

Of late, it has been this area of the RDR that has proved most important to our clients. It is practical advice such as this that is needed to change business models and understand how things such as time sheets will be important.

We launch a new report on professional connections in the New Year and we shall revisit advisers’ understanding of investment trusts in 2010, given that independent advice means consideration of these products. And if you are looking to acquire or sell a business in the light of RDR, it might be a good time to brush up on those negotiation skills with us. If the RDR has taught us anything, it is that evolution is coming and will need to be embraced.



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