You see, in the past, the key definer of an IFA’s success was the quality of the relationship they had with their clients. Those who maintained a regular service to a big client base were the most successful. This suited those with strong personalities and plenty of charisma. It was this that made the consolidation of small IFA firms into national businesses so difficult and led to the rise of the networks.But as regulation has developed, so the main requirements of practitioners have shifted from the personal to the technical. Only the few members of the old school who were technically very sound survive as independent businesses today. Along with regulation and the shattering of trust in financial advice generally has come a far more cynical, suspicious and savvy consumer – one inclined to see charisma as the mark of a salesman and to actively seek out a technician. But the trouble with technicians is that they cost a lot and are not so good at getting most clients to make decisions in a fashion profitable to their employer. The solution best suited to take advantage of this shift in client behaviour seems obvious to me. It is a bunch of charismatic client-facers supported by a range of specialists on whose knowledge and products they draw to provide solutions that stand the harsh test of regulatory hindsight. Advertising agencies have been doing it for years, with account handlers fronting the creatives. Accountants, too, have had tax managers supporting the partners. But getting historically successful IFAs to move into a world where their clients depend on the advice of others in the firm as well as their own is a long hard road. The alternative is to offer consumers a business that just does one thing on a scale that allows low cost and with a focus that allows real expertise. It is noticeable that most of these specialists thrive while many of the generalists do not. However, the trouble with such firms is that clients eventually need lots of them to address the whole gamut of their needs, so the once all-powerful adviser-client relationship is now a weak thing that survives only as long as a better deal does not come along. Thus, specialist houses, except in the most highly technical areas, are always vulnerable to a good relationship merchant, provided his deals stack up. The only way to achieve that is through general practitioner advisers (multi-tied or independent, dependent on the target market) who never actually give advice themselves but pass on the technical achievements of others. In truth, though, the banks discovered this long ago and, having wasted vast amounts of capital failing, they, unlike IFAs, have yet more to deploy and have nowadays almost succeeded in making this generalist/specialist approach work for the bottom to mid-market. As Chancellor Gordon Brown is doing his best to put the whole country into that zone, there may not be much room for the rest of us. Get yourself consolidated into a really well-run IFA, either as a specialist or client account handler, and your future will be bright. Finding a well-run IFA is not easy though, so happy hunting. Tom Baigrie is managing director of LifeSearch
Chancellor Gordon Brown’s Budget was billed as a vote-winner. Cash for schools and families, together with free bus travel for the elderly, certainly grabbed the headlines.
Woolwich Plan Managers has established another issue of the accelerated growth plan, a capital protected bond that provides geared returns linked to the FTSE 100 index over a six-year term.
The personal touch is missing from the selling of investments, which may account for declining demand, says Brian Tora.
A few PFS members have become quite heated as a result of views we have expressed on the publication of the ABI paper, Financial Advice: How Should We Pay For It? I suspect their reaction is motivated more by fear of loss of income than the desire to come up with an equitable solution which improves confidence in the financial advice sector.
The fastest growers in the Artemis Global Select Fund this year were also the largest companies, Amazon and Nike. Simon is looking to buy more like them in 2016.
News and expert analysis straight to your inboxSign up
Latest from Money Marketing
Lawyers who represent investors against Berkeley Burke over allegations of mis-sold Sipps estimate more than 1,000 claims could be in the pipeline. The High Court has approved a group litigation order relating to claims against Berkeley Burke Sipp Administration, and those affected have until 23 July 2018 to register to join the group action. It […]
Do not be spooked by recent falls. The bull market has further to run. Stockmarkets have been thriving in the not-too-hot, not-too-cold “Goldilocks” backdrop of the last few years. Growth has been strong enough to boost profits, and inflation low enough to keep central bank policy loose. Recent stockmarket weakness is centred on signs that […]
The FCA continues to engage with the asset management industry on new European regulations as questions remain over how firms should report costs and charges. After over a month since Mifid II and Priips came into force, concerns have been raised on how fund fees, in particular transaction costs, should be calculated under the two […]