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Q&A: Phil Young

Recently, people have got into financial services by some sort of intent. But I fell into it like most other people from a good while ago.

In launching threesixty we could see that doing things on more of a fee-based model was very sustainable. And it was really transparent.

It helped that Simplybiz launched at the same time as us and they charged on a percentage of turnover and had a similar message to us. Between the pair of us we were targeting different parts of the market but were both trying to change people’s perception.

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There were a lot of good intentions behind the RDR. But people’s intentions and the results tend to be quite far apart at times.

We agreed with the vast majority of the principles but disagreed with some of the detail. We lobbied and continue to lobby on the way in which capital adequacy was proposed.

There are clearly loads of good advisers running really good firms now. Many of those had adopted all of these principles way in advance of RDR.

The quality of advice has vastly improved, but there’s a lot less of it. A lot of people are underserved and one of the purposes of the RDR was to widen access to advice.

My issue with execution-only websites is that most of the DIY websites are predicated on people having cash to invest. Most people don’t have £30,000 in a bank account.

Most people now have £50-80,000 sat in a pension pot somewhere and have no idea if that’s good bad or indifferent. They need to know if they’re in a decent pension contract in the first place, are they in a decent fund, are both of those priced correctly and if yes should they now have the confidence to tip a load of money into it?

In an ideal world everyone would have access to financial advice. Post-RDR we have to acknowledge that this is just not going to happen.

We have to find something between full advice and execution-only, that gives people some kind of a steer. The way the regulation’s drafted at the moment it’s impossible to do that without giving full advice, or so close to it that the costs are pretty much the same.

There’s an acceptance that financial education at a very young age will start to come through at some point in time. Generation X and part of Generation Y have a big red pen struck through them at the moment.

There are still some really grubby things going on in the protection industry that even advisers using these products aren’t aware of. There are issues such as premium loading to pay for commission, which the industry needs to wipe out immediately if commission is going to be sustainable.

There are so many environmental factors that can affect advisers: a regulator that can impose fines based on misdemeanours of other advisers, the stockmarket or the banks collapsing. There are a lot of things that could affect an adviser firm even if they’re doing everything right within themselves.