Speaking to ifa, Map My Plan founder Paul Feeney said the financial advice industry is under pressure to change and move away from existing business models.
“The cry is getting louder and louder for the separation of product and advice, the undertone there is that we have to start being an advocate for our clients first and foremost, and the vast majority of us are,” Mr Feeney said.
“We’ve got to take the approach that we’re just advocates for our clients’ wellbeing and try to help them achieve their goals, and along the way there may be one-off services or solutions that we need to provide to them, but we can’t be focused on transactions anymore, we need to focus on what the outcome is for them, and the by-product of that will be implementing strategies for them.”
Mr Feeney said one likely result of this is a shift in the way the industry operates, which will bring it more in line with the way the law industry runs.
“The way I see the industry going is to be much closer to the legal profession. You have a look there, they’ve got generalists, but then they’ve also got specialists with narrow, deep knowledge in one certain area, but they come together to create a firm that can deliver on anyone’s needs,” he said.
“We’ve got to be prepared to say ‘let’s allow people to go on this journey alone’ and be here as a resource that can help them when a live event or trigger happens that makes them need a certain service.”
I would prefer to see the evolution of the FP profession mirroring the accountancy profession instead (sorry i just cannot stomach the comparison to lawyers).
In the Accounting industry there is a standard for everything, education and ethical standards and accounting and auditing standards are developed independently of the profession with input from diverse stakeholders and the industry is working on harmonizing standards across the world so the profession can be truly global. we need to have that level of technicality, and long process for qualification (about 6 years in total including degree and mentorship) so we can truly develop as a global profession.
furthermore, the FP industry and profession can co-fund a research body who approves products, and only those products approved by that research body can be prescribed.
that will fix most ills, long qualifying period so only the most capable enter, independent advisers who can have confidence recommending product independently researched and thus cannot be held liable for product failures and a public who can be confident in the process.
It’s what I’ve been saying for ages. Just give the advice and set them free. But oh no, we all wanted to hold their hand all the way through and charge them every month, and now it’s come back to bite us. I guess the issue is compliance. We need the ongoing fees to be profitable. Can we provide non product specific advice i.e. strategy advice without an SOA? If there is no conflict and no product recommendation or ongoing remuneration, life should be pretty simple, yes?