OpinionDec 29 2015

2015: the year the tide turned for IFAs?

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2015: the year the tide turned for IFAs?

Could 2015 be the year the tide finally started to turn for the professional adviser community?

I am referring to the recognition of the value of what the advice community does in delivering much needed financial advice is concerned.

We probably won’t know the answer to that question for some time. However, as Einstein put it “the definition of insanity is doing the same thing and expecting a different result”.

I hope the powers that be are starting to recognise this fact and, amongst other things, change the way the Financial Services Compensation Scheme is funded, introduce a long-stop on advice liabilities and move the supervision of professional advisers from the Financial Conduct Authority to a professional body like the Personal Finance Society; or set up an independent advisers-only regulator.

There have been some encouraging acknowledgments of what isn’t working and, hopefully, with the Financial Advice Market Review and pressure being brought by the Association of Professional Financial Advisers, Libertatem, the PFS and others, the message is starting to get through.

I hate to sound like a grumpy old man, but I think it is important to say something when given the opportunity, or I have no right to complain about way the professional advice community is currently controlled by government and regulator.

Over the years I have met many people from the FSA and the FCA and I can honestly say the ones I have met are decent people who try to do their best and perform their roles in a balanced and objective manner.

However, no matter how good or how well intentioned they are, if the system under which they work is flawed, they have an impossible task and those of us being regulated are going to feel aggrieved by not only the way we are regulated, but at the rising cost of being regulated in such a manner.

In particular, I am referring to the Financial Services Compensation Scheme levies, the perceived gravy train some of the senior staff ride, i.e. the galactic salaries and benefits those in the advice sector can only dream of, and the perception - true or otherwise - that advisers are treated as guilty until they prove their innocence, contrary to natural justice under the law.

I’m not going to hold my breath, but for the first time in quite a while I have some optimism that the so called ‘advice gap’ and shrinking advice sector is at last making the powers that be realise that things have to be managed differently.

Advisers need to be treated as professionals, rather than product sellers only capable of selling long-term insurance policies for high commissions.

Those days are well and truly behind us and so we need a regulator and a form of regulation fit for the years beyond 2015.

Malcolm Coury is managing director of Money Wise Independent Financial Advisers