Boundaries are important. Currently, our neighbour is changing the fence that separates our rear gardens. The workers were fine until they stepped into our garden, whereupon our dog made them aware they were trespassing by barking at the top of his voice.
As he is a Westie, that is not too loud but he is sincere in his objections, normally directed at anything that overflies our garden.
Aifa recently moved to the point of being in danger of having to change its name. As the bullies in the playground get their way, a change in direction seems to be the order of the day. Despite many years of “independence till I die” (to borrow a phrase from the world of the football fan) we now have “restricted is not that bad”. This volte-face simply underlines that many of the networks are out of line with their members, not publicly but privately.
On the one hand, they have been shouting for alternative testing, yet in some ways losing advisers but keeping their clients at a price approaching zero is more appealing than the alternative exams completing their objective.
No doubt the price of firms will fall, especially for the principals who reject the exam alternative and who will not change to a fee-based model.
This will lead to lower-cost consolidation but at the expense of the time-served IFA.
I know it is too much to expect for these networks to be more open but the first one that is deserves praise for its candour.
We need to make sure that client-centric firms are there to offer the public a real choice instead of the product of the RDR being the loss of choice and the loss of quality firms and advisers who are caught out by time catching them up.
Returning to the domestic scenario for a moment, when president Obama first visited the UK, he flew over our house in Airforce One with his fighter escort. The dog barked as if to say, this is my patch, so take a detour.
The president did not detour and neither should we, just because there is a lot of noise telling us that restricted is not that bad. Not that bad for them but not good for clients or professional advisers.
It would be great if people could be more up-front about their objectives. Using glib phrases to cover up activities that are out of line with professional behaviour does no one any credit.
I read recently that Hargreaves Landsdown has made significant profits by giving no advice. Or did it? If you are yet to read Peter Hargreaves’ book, In for a Penny, I urge you to do so. Peter reveals on p222 that, “We see our job as trying to stop our clients making that kind of mistake (ie. relying on past performance). We can do that in one of two ways. One is by offering advice that steers them away from funds that have done well in the past but are unlikely to do that well in the future.” And does that not just underline that we can call it generic or information but the public and Peter know advice when they see it?
Let’s not restrict ourselves in name or in deed – people will need advice. Let’s not narrow our options by throwing away our independence for an easier option. Like my Westie, now’s the time to make some noise.
Robert Reid is managing director of Syndaxi Chartered Financial Planners