by Susan Edmunds
Britain has gone through a significant period of regulatory change, including a move away from commission to a fee-for-advice model. Advisers have left the business and there have been reports that clients have opted out of advice because they did not want to pay a fee.
But Barry Horner, who is chairperson-elect of the Financial Planning Standard Board’s Board of Directors, told the Certified Financial Planner Professional Day in Auckland this week that regulation could help good businesses.
He said advisers in Britain now all had their own ways of determining what fees to charge, which had to be agreed with a client before work began. Anyone who was to charge an ongoing fee had to also offer an ongoing service.
Horner said he expected the qualification standards for financial advisers to lift but the regulator had identified more than 100 “gaps” where many advisers needed to top up their education to comply with the new rules. But businesses that were running well would have the jump on their competitors in the face of new rules.
Horner said clients were willing to pay if the service was good. “Clients won’t pay for poor service or for commoditised products that they could get off the internet but they will pay for good service. Building a professional practice makes good financial sense.”
Advisers were moving from an old model, where there were more advisers than support people in a business, to a completely inverted system, where each adviser had a larger support team behind them. That way, he said, advisers could focus on what they did best, which was generally dealing with customers.
They could then leave the back-office work to support staff and focus on building a good client base.
Many businesses that were proving successful were extremely niche and targeted, he said.
The keys to success, he said, were having a clear and differentiated service offering, using a team-based approach, and operating a transparent adviser charging model. “What clients value most is the adviser’s wisdom.”
Even quite experienced, well-off clients valued having an adviser there to hold their hands, he said. In periods when investment markets slumped, reassurance was vital. “People will ring and say ‘I know what you’re going to tell me but could you tell me again,” he said.
| « Being an AFA 'isn't good enough' | IFA working on pro-bono offering » |
Special Offers
No comments yet
Sign In to add your comment
© Copyright 1997-2024 Tarawera Publishing Ltd. All Rights Reserved