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This is the time of the Ifa

Ashley Law head of sales and marketing Ian Harrison believes that only independent financial advisers can offer the service that is demanded by today’s discerning consumers.

Have you ever been thoroughly convinced of the merits of one virtue over another, only to realise that a slight adjustment to your perspective can suddenly reveal a whole new, and sometimes braver, world?sIn many ways, such a discovery can be liberating and exciting. However, letting go of past certainties for a more fallible future might be seen to require courage akin to those navigators of centuries past, who dared to defy the, then, current convention of a flat and limited globe.

The question arises, is being a tied or multi-tied adviser a realistic and long-term career option?People have told me, gently and forcefully, for years that operating as an independent financial adviser was the only true path. But the motto for many tied-advisers was that a protected family is better than one that has no policy at all, even if it is not really appropriate. So, I carried on selling the products of a single company or of a limited range, like others, in blissful ignorance of the less than adequate service that we might providing to clients.

Many will accept my premise and perhaps think me foolish for not seeing the light sooner. There will be many of you working for a single company or in a multi-tied environment who may not fully appreciate its significance until it confronts you. And it most certainly will.

Why? Because the consumers of today have become more sophisticated, have more complex needs and demand top quality, trusted, professional and unbiased advice. They also expect you to provide choice because they want to spread risk. Cost is an important issue with transparency around the actual cost and the ability to show that you have offered true value for money is crucial.

The only true way forward for clients with the above requirements is from IFAs, whose choices are not restricted to any form of fixed panels. Multi-tie does not do that. Many of the high-street banks offering one mortgage product and an investment product will just be serving up more of the same.

How did we become IFAs? Well, we generally started off as proven salespeople, often migrating into financial services and trained to sell host companies’ products. We were convinced of our credentials to operate as financial advisers. We had little experience of the greater world out there, for example, the trusts we were not allowed to set up, yet we mistakenly thought we were carrying out “holistic financial planning”.

We became less dependent and quickly learned how to market ourselves, gaining referrals to others. We enjoyed the rewards of the host company, conventions and getting recognition. We became more self-reliant, yes, even organised. We may have had people to do our admin, we were feeling good about our skills, becoming confident about our abilities and competence. We started looking at becoming IFAs as we were capable of doing more.

The host has spotted this coming and has many promising and lucrative-looking reasons why we should stay for the next five years. Do we stay? Knowing that we will be unable to give our clients the most appropriate advice in the future? Or do we step into an environment where there is no further dependency on a provider? If we do, who will benefit from all those clients and their renewals?To become independent, we need the control to grow our business, with customer relationship management. We can become part of a practice or form one ourselves with some of our old hosts or IFA chums. Although this has been a natural progression, with some business hurdles to get over, emotionally letting go of perceived security is an enormous step and the fledgling IFA will need help and support.

The concerns voiced are:•How do we master all the knowledge, given the wide choice that we will have to offer?•What research technology will we need?•Do we go to a network or become an associate partner or a registered individual with a firm?•How do we set up, should it be a partnership, how many people should we work with?Thankfully, many thousands of us have evolved in this way – let us not forget all that experience and start out on this merry-go-round again.

The challenge for the industry lies in helping and encouraging us to invest in profitable new IFA practices, not in lining the pockets of multinationals.

We need to support new entrants such as graduate trainees who can start an apprenticeship as an IFA. All this will help to ensure that the consumer is serviced as they would expect.

There is talk of market changes threatening the existence of financial advice and advisers but I believe that we have a genuinely golden opportunity where the rewards will go to the fully rounded professional IFA who has the experience of looking after consumer needs, has done years of training, acquired the assurance of demanding qualifications and gained the respect of other professionals.

Now is the time for the IFA.

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