OpinionMay 31 2013

How do we stop asphyxiation of advice sector?

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If there is one thing that gets my goat it is the tendency towards wallowing that is persistently evident across the adviser sector.

Over the past five months - and, frankly, for a long time before that - trade titles aimed at financial advisers have been regularly carrying stories predicting a vertiginous drop in the number of advisers post-Retail Distribution Review.

Often these articles are based on little more than a consultancy firm’s subjective observations or surveys with modest and barely representative sample sizes. Why are they run so regularly? Because they never fail to attract a substantial audience.

We at FTAdviser have obviously run our fair share of such studies where we’ve felt the figures are credible enough to deserve reporting, but we’ve limited our output of those that are rooted in conjecture.

This is not an attempt to stem the flow of bad news. It goes without saying that the fortunes of this title are inexorably tied to those of the sector which provides our audience, but we seek to live by the Financial Times’ guiding principle of ‘without fear or favour’ and report objectively on what is important and, critically, justified.

The advice sector is being threatened by a paucity of new blood that has the potential to starve it out of existence in the next decade or two

To this end we’ve balanced our output of these eschatological exaltations with an array of positive stories that are equally as regularly coming to the fore post-RDR.

Thus we’ve led with research such as that published by comparison website VouchedFor, which showed that a huge proportion of 223 surveyed advisers are reporting a big increase in clients - and especially clients that have never before sought advice - post-2012.

Similarly, we’ve highlighted numerous examples of adviser firms seeking to grow due to an increase in business. Whether through acquisition or organically, expansion is definitively one of the key post-RDR trends.

Of course, the extent to which all of this is a result of the rule changes is debateable. To quote another FT aphorism used in the brand’s marketing: “We live in financial times”.

The ever-increasing need to prepare financially for the future, coupled with the growing awareness of product complexity and the prevalence of industry scandals is giving many people more reason than ever to seek advice.

Indeed, in the words of Malcolm Streatfield, chief executive of national advisory services business Lighthouse Group, with whom I had an illuminating chat over lunch recently, we could be looking at a “golden horizon” for the industry.