OpinionFeb 5 2014

More must be done to prove advice value to press and public

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The recent announcement from the Financial Services Compensation Scheme that its levy on investment advisers will rise by 34 per cent is yet another blow to an industry whose regulatory resilience is certainly being tested. Costs, yet more costs.

And the recent update on the sorry affair that is Arch Cru from the Financial Conduct Authority shows that the regulator is happy to take a hard line on the industry, even when advisers’ clients do not support such a stance.

I find it particularly revealing that less than half of the investors who were recommended Arch Cru funds have taken up the offer of redress (insisted on by the FCA) against their adviser. This statistic suggests that the majority of clients feel their advisers were not to blame for the Arch Cru debacle and that other parties, namely Capita as authorised corporate director to the funds, were the culpable ones. Strangely, but not surprisingly, the regulator does not agree, fuelling the suspicion that it finds advisers are easier targets compared to one of the country’s biggest Plcs.

Against this rather gloomy backdrop (sorry, readers), it is great when a little blue sky emerges to suggest that professional financial planning is alive and kicking. I saw this with my own eyes a few days ago when I was asked to speak at a meeting of the Cellar Club in deepest, darkest Birmingham.

A group such as the Cellar Club is a rarity these days, if not a loner. It provides a forum for some of the country’s top financial planners to meet, exchange ideas and enjoy some rather splendid food. Sadly last Christmas I was told that the Thames Valley Life and Pensions Society, a similar meeting group, had folded following the death of its chairman. I do not know now of any other adviser meeting club – if you do, please let me know.

The Cellar Club, quite thrillingly, is thriving. Based in Birmingham, it is now 40 years young and its two founding fathers, Paul Etheridge (of Prestwood fame) and Alan Smith, continue to attend every meeting, smartly decked out in their black ties and maroon smoking jackets (the original dress code requirement). The younger of the group still dress in black tie and dinner jacket.

New life has been breathed into the club with the appointment of guitar playing Mark Rogers as chairman.

He has set up a website – cellarclub.org – and moved the meetings from Simpsons Restaurant in Birmingham to the city’s University College Birmingham where students both cook and serve the food. It was an excellent decision. My pan-seared scallops, wild sea bass and artisan cheese were a delight. It is just a shame I could not enjoy a little of the Malbec, although wine waiter Andrew (young enough to be my grandson) kept me happy with a stream of diet tonic water.

Mark Rogers, managing director of Birmingham financial planning firm Clay Rogers, has also sought to expand the club’s membership – from a very exclusive 30 to an exclusive 35. Yet joining is not easy. First prospective members must attend two consecutive meetings. Then existing members are asked to approve or blackball their bid for membership. Although Mr Rogers would not reveal names, members have exercised their blackballing rights on more than one occasion.

I will not bore you with what I talked about – pensions, copycat websites and, of course, RDR – but what came out loud and clear from the meeting is that irrespective of what the regulator throws at advisers, professional financial planning must become a vital part of the personal financial landscape.

As one of the members said at the meeting: “Professional financial planning is nowhere near trying to sell superior investment returns. It is all about organising clients’ finances to meet their longer-term aims and objectives and to advise them on a suitable investment strategy to meet these aims and objectives. It’s about helping people to meet their aspirations.”

How can we promote more the value of professional financial planning? Of course the Institute of Financial Planning does its bit with Financial Planning Week. But this is just a one-week marketing exercise – albeit a very good one. For the other 51 weeks of the year the IFP goes dormant on the consumer front.

Unbiased also does some sterling work with its regular research.

Yet more needs to be done. Someone, somewhere needs to take up the mantle on behalf of financial advisers and planners and convince a cynical consumer press and a cost-conscious public that professional financial planning is often invaluable. And that any fees involved in that financial planning process can be more than offset by the value of the advice given.

Certainly I am interested in speaking to people who have had their financial lives transformed by a financial planner. They make for good personal finance stories.

So I make a request here and now. Have you got any clients who are happy to talk about how financial planning has revolutionised their personal lives? If so, let me know. I am all ears.

Have you got any clients who are happy to talk about how financial planning has revolutionised their personal lives?

Long live the Cellar Club.

Jeff Prestridge is personal finance editor of the Mail on Sunday

You said:

John Bloomfield in response to the story on estate agents holding extraneous prospective homeowner data (Advisers back tighter control of estate agents, FA 30 January).

This is nothing new; it has gone on as long as I have been in the industry. In the past, however, most agents would accept a letter from me saying a client has been assessed by me and I see no problem in obtaining a mortgage. This worked for me and the client as I won’t do an agreement in principle until property has been found and the offer provisionally accepted as I don’t want to have to keep credit scoring the client all over the place if the property falls through. Now the agent wants site of the AIP itself which buyers hate as it normally says maximum mortgage amount on the certificate and that is certainly info they do not want the seller to have.