Let’s for a moment rewind to the summer of 2012 – the personal finance section of the
Daily Telegraph published a research study that found that the television character most closely associated with the term ‘’financial adviser’’ was the market trader Del Boy, from the popular sitcom Only Fools and Horses.
It’s no wonder the Financial Conduct Authority’s most far reaching set of regulation, more fondly called the Retail Distribution Review was enforced in December that year. The RDR set out to overturn such negative stereotypes of advisers by making the provision of financial advice to investors more professional and fair. At the time, most advisers were broadly supportive, with a number of adviser networks and trade bodies backing the Personal Finance Society’s Consumer Confidence Campaign that used the RDR to change consumers’ views and build trust in financial advice. Fast forward to 2016 and one can’t help but wonder if the objectives of RDR have been fully achieved? Was the overall bid for professionalism lost in the detail of the more controversial aspects of the regulation (fines, fees, future of financial advice…)? Has the RDR really helped to promote and build trust in the financial advisory profession?
Investor behaviour research published in the last few months has indicated that the rift between advisers and investors still exists. Boring Money’s Spring Census published in April 2016 that surveyed 2,042 UK adults found that only 8% of adults are prepared to pay more than £100 an hour for advice. A third of the households with £100,000 to £150,000 of savings and investments said they would pay up to just £50 an hour for advice – the same percentage said they would not be prepared to pay anything for service. The report further highlighted the fact that 25.45 million UK adults have a savings or investment product, yet just 4.1 million adults are reported to be in an ongoing relationship with an adviser. Similar research from Legg Mason found that 60% of the 5,000 over 40 high net worth individuals were not prepared to pay anything for advice. Adam Gent, Head of UK sales at Legg Mason said that the research was rather surprising three years after the introduction of the RDR… So why don’t people engage in financial advice? Engage Insight research sponsored by IRESS highlights the lack of trust in financial advisers by the wider public as one of the top reasons. FT Adviser analysis around this issue points to the issue of lack of perceived value in advice compared to other professions.
Improving professionalism is key to building trust and the RDR set out to achieve this by making professional qualifications mandatory and setting out requirements for CPD in the run up to 2012. But at the time, in the midst of having to rebuild business models to accommodate fees and pass a number of exams, CPD was generally viewed as just another box to tick in order to attain the required Statement of Professional Standing (Professional Adviser, 2016). However, investing more time and resource into well diversified CPD programmes can be of great value to advisers. Tom Hegarty from New Model Business Academy views CPD as extremely rewarding process which is beneficial not just for an adviser or his/her firm but also the investors and clients that they serve. Although the FCA specifies within its training and competence requirements that a number of areas should be covered under the CPD rules, it does not recommend any guidelines or provide a framework on what these areas should be. Tom adds that often advisers pick up their 35 hours in a ‘piecemeal’ fashion which means that too many advisers are still not reaping the benefits on offer from a balanced and tailored personalised CPD plan. (‘’Making sure CPD is on your side’’, Professional Adviser, 2016)
Staying relevant in today’s fast paced financial landscape is a concern for many advisers, as they are faced with the challenge of having to alter their propositions in response to the rise of D2C platforms, self-investing websites, robo-advice and a growing new millennial market. A thoughtfully created CPD plan covering areas such as technology, business development, personal development and industry insight can help advisers stay up to date and current– equipping them with the tools to identify opportunities and protect themselves from threats in their commercial and regulatory environments. CPD accredited content is now readily available from a number of independent industry bodies, the financial and trade press but it should go beyond reading articles - Advisers stand to benefit from seeking more in depth learning that can enhance the way they provide advice.
After a decade of helping advisers with their research and investment needs, FE has expanded its commitment to advisers by providing additional training, knowledge and ongoing support. This takes the form of quarterly webinars, educational content, weekly reviews and most importantly through exclusive investment forums. FE conducted its Regional Investment Forums in ten locations across the country in the last year offering clients structured CPD certified content and insight. Earlier this year, FE also launched a dedicated FE Training Academy that offers customised modular training to advisers and paraplanners to help them get the most of the services and tools they use from us. Following the CPD accredited training and examination, Advisers can qualify as ‘FE Analytics certified’. Since its launch, the certification has been quick to be adopted as it not only indicates a level of knowledge of FE Analytics but also the key skills involved in researching investments and providing robust investment advice.
For more information, please contact us at enquiries@financialexpress.net