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Rebooting Advice

Author Image Vince Smith-Hughes Director of Specialist Business Support, Prudential
5 minutes read
Last updated on 17th November 2020

Overview

On the 7th October I hosted our ‘virtual’ H2 seminar event, Rebooting Advice. I was delighted to be joined by five key, thought leaders in the financial services profession. These were

Ross Liston, MD of Bankhall and PMS
Neil Stevens, Joint CEO, Simplybiz Group
Russell Facer, MD of ThreeSixty
Robert Reid, Principal,  Syndaxi Chartered Financial Planners
Simon Collins MD of Konexo UK

As you can imagine with the intellectual might on show, some very insightful and thought-provoking issues came to the fore. I haven’t got anywhere near the space to do them justice here, but hopefully this will give you a flavour of the content that the panel discussed across three different sessions.

The value of Advice

Financial Advisers have been of great service to their clients during the pandemic, with client contact returning to around 90% of pre COVID levels within a matter of weeks. This helped to restore client confidence, and critically ensured many clients stayed invested to benefit from the returns available since the bottom of the market in March. This doesn’t look to have been the case where advice wasn’t taken. The advice profession has demonstrated tremendous agility and resilience since the crisis started, and this has often extended to areas over and above solely the provision of advice.

To help to ensure clients remain front and centre of your advice proposition, make sure you are obtaining regular feedback from clients directly, or even consider putting some client representatives on an advisory board.

ESG considerations will really come to the fore into 2021, and advisers need to consider this in their proposition now.

The Advice Gap

Whilst it was agreed that there is indeed a noticeable and obvious advice gap, several of the panel were at pains to point out that this issue isn’t one for advisers to solve on their own. Also, extending out advice to more individuals could have consequences for the business going forward, and advisers need to be aware of any risks this can bring. Having said all of this, there are lots of opportunities to broaden advice to a greater number of people, particularly with improved use of technology.

Advice charges

Pressure on charges will continue across the board, - on advisers, platforms, DFMs, investment houses and providers alike. Advisers need to carefully consider their proposition and what it will look like, - many of the panel agreeing that it is becoming harder and harder to become ‘all things to all men’. DB transfers are a great example of this. Advisers must avoid getting involved in a ‘race to the bottom’, - providing value to their clients remains core.

IR35

Off-payroll working rules, known as IR35, are extended to the private sector and change on 6 April 2021. Whilst this may have an impact on many adviser’s clients, it’s also likely that many adviser firms will also need to consider the employment status of their own advisers, who currently may be self-employed. The benefits of maintaining self employed advisers must be weighed against regulatory considerations.

Readers can find out more on the general rules here

Intergenerational Planning

Advisers need to give more consideration to intergenerational planning, - many wealthier adviser clients are in the later stages of retirement, and there is divorces and premature deaths to consider. Create a habit with the next generation of using your services, and chances are they will stick with you in the future. This could be imperative to maintain the value of adviser businesses.

Suitability Review 2021

Consider what lessons we have learned from the DB transfer review. Don’t rely on second line compliance checking for your advice processes – for many advisers better use of technology can achieve a compliant, consistent approach across all advisers in the firm.

Summary

These were three excellent sessions, which I have in no way been able to do justice to in this short article. For much more in depth analysis of the above topics and more besides please visit pruadviser.co.uk/knowledge-literature/virtualseminars/rebooting-seminars-investment-advice/ where you can watch these sessions at your leisure.

Here you will be able to watch all the content of not only the rebooting advice session, but also our rebooting investment morning from a few weeks previously.

If you missed either session, I strongly commend you take some time out to consider these important topics.

From a Prudential UK  perspective there are a number of items that you may find useful in relation to some of the subjects discussed.

  • Our back catalogue of webinars including those available on DB transfers and how to meet the regulatory requirements
  • Drawdown checklists to sense check your at retirement processes
  • Our tax relief and bond gain calculators
  • Our intergenerational planning hub

If you would like more information on any of these, please contact your account manager.