Founder of boutique compliance consultancy B-Compliant Vicky Pearce talks advice’s “charm offensive” and how firms should grow their own planners of the future.
What is the most encouraging advice market trend you are seeing at the moment?
The level of innovation from both existing and new entrants to the marketplace. We are seeing more and more examples of fresh thinking as to the best way to deliver financial advice, not only to the wealthy, but also to those who need financial advice for the first time with the introduction of online advice services.
What are the keys to winning over more consumers to start seeking advice?
Despite the recent drive towards austerity and tightening of personal budgets, perhaps the biggest challenge in attracting consumers is one of trust. The vast majority of financial advisory firms provide excellent service, advice and support to their clients, however for those individuals not engaged with such an adviser, the lack of trust by consumers towards financial services remains.
From mis-selling by the banks, to the antics of a few firms during the Tata Steel pension fiasco, consumers influenced by a media hungry for soundbites and headlines are understandably reluctant to re-enter the market. The FCA and those involved with the manufacture and delivery of financial solutions need to go on a charm offensive and extol the benefits of seeking professional financial advice.
What key reforms would help get people saving more?
There needs to be a long-term strategy (10 years plus) to encourage consumers to commit and start saving. This strategy should be supported by government (and not changed on a political whim) with product manufacturers designing simple, inexpensive, safe products that are easily understandable and deliver what is expected after a set period of time.
The most difficult issues will be trust and cost-effective advice systems to support. Many of today’s investors are individuals who began saving decades ago and continue to do so.
How can advisers best show their fees are worth it?
For adviser firms, the value for money feeling a client wants will often be a simple matter in times of growth and increased returns. It is when the bull becomes bear and reduced fund values drive clients to question the value of the fees they pay that this becomes a more awkward question.
A clear explanation of the service the adviser provides at outset, and at follow up meetings, sets client expectations from the outset; when times are good or when they are not you are there to assist them in making the correct decisions regarding their finances. It is when promises or certain expectations are alluded to and these fail to come to fruition do the more challenging conversations begin.
What should we be doing to get more new advisers into the profession?
With new advisers will come new ideas and potentially different cohorts of consumers. It is therefore vital that current firms find a way of developing the advisers of tomorrow as the home service and bank assurance sales forces are consigned to the distant past.
Smaller firms may face greater challenges in respect of developing their own advisers, however larger and wealthier firms may well find that a grow your own approach will not only be cost effective, but it provides a level of future proofing and provides development for those who are currently well qualified as paraplanners and have aspirations to become advisers.
Whilst many will focus on graduates, mature entrants and apprenticeship opportunities should not be over looked when considering future advisers.