Top 10 reasons to stay independent

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Restricted, independent, multi-tied, single tie, non-advised: with the proliferation of ways to deliver financial solutions, you could almost be forgiven for thinking it’s simply a matter of choosing what suits your business best.

But for me, when you are advising customers on their money, isn’t it about them? Shouldn’t our ethos always to find them the best deal and give them the right advice?

The great thing is that a sober analysis of the argument also reveals some really strong commercial reasons for staying independent. Let’s look at them;

Nothing Wrong with Magnolia

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We’ve all had this one drilled into us for years from the never-ending (but latterly somewhat subdued?) stream of property TV shows – if you want to sell your house go neutral, paint everything magnolia and de-clutter.

The simple lesson is not to put buyers off, give them nothing to wince at. To present an opportunity for the buyer to put their own mark on a relatively blank canvas. They can soon make the place comfortable and homely, buy a cat and put the kettle on. Lovely.

I know this is a bag of well-worn clichés, but there are some real lessons to learn here for the RDR run-in.

Diploma: Is this your Everest?

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With only a short time to go to the implementation of RDR, the majority of advisers are in the final stretch of diploma qualification. The Industry hasn’t seen a mass qualification event on this scale in almost twenty years and hardly a day goes by on various social message boards, blogs and company intranets without...

Honister – don’t jump out of the fat into the fire

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It’s a sad day for all of the advisers in Honister, Burns Anderson and Sage. The prospect of being unable to make a living and potentially losing your pipeline will tempt many advisers to jump at the first offer they receive from another network.

And there will be lots of offers! Every network recruiter will be dusting off their prospecting database and hitting the phones hard. So, what should advisers and firms do?

Why the Money Advice Service must change

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In the real world, businesses set their objectives with a rigorous examination of the benefits, the resources available and the likelihood of achieving them. Very often plans have to be changed and difficult decisions taken to ensure that the business remains viable. Above all the shareholders of the business will hold management accountable to ensuring that plans are sensible and that they are delivered.

In the fantasy land of the Money Advice Service (MAS) none of this seems to apply. When a Quango acquires a statutory objective, they also get a key to the money printing press. Their budget for 2012-13 of £80.8m is their estimate of what they need to deliver the objectives given to them.

Changing the guard

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Will the appointment of John Griffiths-Jones change the way the Financial Conduct Authority will operate?

As with all appointments to the regulator, it is vital to study what their public pronouncements are. When appointed as FCA Chief Executive, Martin Wheatley said “I want to ensure that FCA delivers a regulatory regime which ensures market confidence and delivers strong consumer protection.”

And all the signs are that this is exactly what he intends to do.

For the observant, there have already been signs that things are changing.

The thin end of the wedge

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I see that the trade press has finally picked up on a case where a PFS member has been disciplined under the Ethics code for excessive alcohol consumption and aggressive behaviour at a PFS event.

There have been over 50 comments added to the story and reading them is a fascinating insight into the attitudes and approach of our profession. The views expressed range from outrage at the action to total support for the PFS.

Network Charges – Bundled or Unbundled?

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It’s long been a gripe of mine that many AR firms don’t exactly know when their chosen network is making a turn. It’s quite amazing when you think about it – whilst RDR is making the cost of advice crystal clear to consumers, and the FSA is driving transparency into the mystic world of bundled platform charging, advisory firms are a little foggy over their network charges.

An oft-quoted benefit of being directly authorised has been ‘at least I know where I stand’, but being small and DA may be a bridge too far for many IFA firms in 2013. So, to pose a simple question, why can’t firms know where they stand AND be in a network? These are not incompatible concepts.

Developing a Non-advised Proposition – Part 2

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Last week, I looked at the “advice gap” and why providers will increasingly see this as an attractive channel to complement their intermediated strategy.

As we approach RDR, professional adviser firms are putting the finishing touches to their customer proposition and pricing. So what is the best way to service clients with simple needs or where the cost of giving advice is not covered by the fee collected?

It has always been true that advisers have provided advice to clients where the commission does not cover the cost of the advice. Does this make sense in the future? Some advisers will set out a minimum fee for their service and some will set out a minimum investment before they will provide advice.

Developing a non-advised proposition

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As RDR has developed, learned commentators have predicted that there would an advice gap, created by IFAs moving upmarket. Many also predicted that this would see the return of the insurance company direct salesforce.

But so far, this simply has not happened. The Man from the Pru has re-appeared but only to service the orphan clients from the original salesforce. As I write this article, I see little likelihood that any insurer will take the risk of launching and then managing any kind of advised distribution channel. I say this for two main reasons; firstly that they lack the risk appetite for giving advice and secondly, that they also see that the economics of a single tie focused on lower value clients cannot ever be positive.

No, to a man, they are putting their faith in three solutions: