Some nine months after the introduction of RDR and in the midst of a swathe of scandals, including the mis-selling of interest rate swaps and payment protection insurance, and the rigging of Libor, it might not appear to be the best time to take over as president of the Personal Finance Society, as David Ingram did in September.
However, having spent his entire working life in the financial services sector, largely in the field of independent finance advice, he relishes the challenge involved in attempting to redefine the image of the financial sector in general to the UK public.
Mr Ingram said: “The bottom line is that the people who already do business with independent financial advisers trust them implicitly and, in many cases, have done so for many years, while the public in general don’t trust the financial sector, so it is part of my job to highlight that the independent financial advisory sector is worthy of that trust, to a wider audience.”
Part of this image makeover will come from within the IFA industry itself, he said, with the PFS keen to promote a more mutually supportive atmosphere within the sector, which is currently sometimes characterised by negative comments being made by one or more financial adviser about others.
He said: “You would never see the type of backbiting among, say, the legal profession as you see on anonymous blogs relating to the independent financial advisory sector, especially in this country, and it is time for IFAs to realise that this type of interaction is counterproductive for the whole profession.”
He added as an adjunct to this that the PFS was now expanding its dialogue with a range of leading consumer groups to explain more clearly how IFAs generally operate, and the level of trust that many engender within the local community in which they operate.
Mr Ingram said: “There has been a lot of talk about the days of many of the smaller IFA firms’ being numbered in the aftermath of RDR but the fact is that many of these firms’ level of expertise and client care are exceptional, as they have to live and work where they operate and regard themselves as being an integral part of their local community.”
This is also a key reason, he underlined, why the widespread notion that many IFAs will no longer be interested in serving clients with less than a ‘golden’ figure of at least £250,000 in liquid assets is generally mistaken.
He added: “Some of the very big firms might adopt this attitude, of course, but for everybody else the fact remains that business will continue to be done for clients who have way less than the figure commonly quoted. Even for new clients the question is not what they have in liquid assets but whether they are willing to pay the fees for the advice receive, as with any business.”
This is a message that the PFS also wants to crystallise to the FCA, which is why Mr. Ingram wants to broaden and deepen the level of engagement with the regulator through a series of regular meetings with key members of the PFS, and various figures from the independent financial advisory sector.
In further exploring these two communications channels, Mr Ingram hopes not only to differentiate the IFA sector from any negative connotations connected to certain elements of the UK’s financial sector in the past few years, but also to create a more equitable foundation upon which the concerns of the sector can be related to the FCA and the PRA.
A prime concern in this regard, he said, was the proposal that trail commission should be banned on the basis that it creates a vested interest in management fees remaining high enough to pay IFAs.
This creates a conflict of interest on the part of fund managers who have to charge enough to cover their own costs and profit margins, plus the trail fees to the platforms.
Mr Ingram said: “We live in a transactional age so to ban trail fees entirely looks to me, personally, entirely inappropriate as it will hit many of the small firms in particular. If there were a greater awareness on the part of the regulators of how the IFA sector really operated then I don’t think that this proposal would have gained so much traction.”
Similarly, he added, a deeper dialogue between IFAs and the regulators might also lead to them counting pro-bono work done by IFAs as part of their continuing professional development, which again he believes would have positive ramifications for the sector with the public in general.
He said that promulgating the idea that the IFA sector is an entirely different beast from those elements of the UK financial sector that have drawn extremely negative publicity in the past may also go some way towards the regulators finally reducing the Financial Services Compensation Scheme levy.
He added: “There has been broad-based agreement that firms that operate in a particularly straightforward, transparent, and professional fashion should be charged less under the FSCS but this has not happened yet, probably in part because the industry is bound up in the public’s imagination with the negative occurrences in other areas of the financial sector.”
Simon Watkins is a freelance journalist
Mr Ingram’s career ladder
September 2013 – President, Personal Finance Society
2012 – Present, The Beaufort Group of Companies Non-Executive Director
2011 – Present Aim Two Three, Partner
2010 – 2013 Personal Finance Society, Vice President
2003 – 2011 threesixty services, director
1999 – 2003 Bankhall Group, director of resource initiatives
1985 – 1988 Sun Life Unit Services, technical manager
1979 – 1984 Sun Life Assurance, Personal financial planning unit
