Sometimes it is difficult to predict how a fundamental change will play out and the debate over independence versus restricted is a classic example.
Every week, there is a new survey predicting the opposite of what we read the week before, so who to believe and what are the real issues involved?
Let’s start with the client and ask what they want. For most clients, they want to deal with an adviser who can help them develop a plan, work with them to implement that plan and be there to review how they are doing and change the plan in the light of how circumstances have changed. That the adviser is completely impartial and trustworthy goes without saying. Most clients want value for money, although I suspect they are savvy enough to know that the quality of the advice and service will always be more important than the cost.
What do advisers want? I still believe the overwhelming majority of advisers want to do the best they can for clients. They enjoy solving problems, they enjoy seeing plans come to fruition and take great satisfaction in seeing clients benefit from their advice. For them, working with the best products and solutions is not just a question of commerciality, it is also a matter of principle. How can they be working in the interests of their client if they have to advise a solution, knowing that a better one is available from outside their range of providers?
But, and it seems to me that it is a big but, if the costs of providing a gold standard service make the proposition unviable, then perhaps clients would be better off with a lower standard of service? The trouble with this is you simply cannot compare money advice with other goods. Choosing a less competitive financial product can make a huge difference. A small difference in charges can make the difference between a comfortable retirement and struggling to make ends meet.
But if we are to believe the restricted cheerleaders, they can provide advice which is just as good, at a cost which is lower, with advisers enjoying higher profitability and providers willingly sharing the fruits of their huge business efficiencies. I may be a sceptic, but it sounds far too good to be true. It is a bit like a political party claiming it will increase spending while reducing taxes, it just does not add up.
I know of no other profession that offers best advice and something “not quite as good”. I passionately believe most advisers want and intend to stay independent. They understand giving clients the best possible deal is a vital ingredient in business success. They also realise that, in a financial advice business, when you start to believe that making money for yourself is more important than making money for your clients, the whole raison d’etre of your business is undermined.
I am proud to be part of a business which is committed to the ethos of independence, committed to the idea that we should give clients the best possible advice at all times and committed to helping its members to do just that. That is why Sense is a resolute supporter of independent advice.
Steve Young is commercial director of Sense Network