Greater professionalism in the advice remit hasn’t always been reflected in the provider sector, Almary Green’s managing director said, stating that he has seen “huge inconsistencies” by providers.
Carl Lamb told FTAdviser that when a client is faced with paying more for a clean share class than for a “dirty share class”, then there is something fundamentally flawed in the process.
Providers also seem to have been overwhelmed by the roll-out of auto-enrolment over the past year, he added.
Mr Lamb said his experience is that their capability and capacity – and enthusiasm – to deliver the new qualifying schemes has been hugely overestimated, to the detriment of small businesses and those with low paid workers.
Looking ahead to 2015, he said that based on the number of approaches his firm receives, more consolidation and shrinkage within the advice sector is likely, with firms merging and some closing their doors altogether.
“We are regularly approached to consider buy-outs or mergers and it may be that some of those opportunities will come to fruition during the coming months. As a firm, we will continue to develop and evolve as the regulatory framework changes.
“Sometimes it feels much like being at the Alamo – if we raise our heads above the parapet, someone will start shooting at us and continued attacks on what is perceived to be a fair price for advice will undoubtedly put the squeeze on margins yet further.
Mr Lamb stated that it is a “sad fact” that 2015 may be the year that IFA firms accept they must bid farewell to clients whose portfolios are insufficient to make fees affordable.
“However, it is important that independent, high quality advice continues to be available, not just for the very wealthy, but also for those with lesser amounts to invest.”
emma.hughes@ft.com
