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.
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.
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.
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.