Historically, financial services was often said to be boring.
If that was ever really true, it has certainly not applied to the world of financial advice in recent years. The never-ending changes in regulation, products and markets continually highlight the vital importance to clients of ongoing services. I therefore want to illustrate a few of the issues that have impacted on financial advisers and their clients over the past two or three years.
In late 2014, Brexit was considered a joke, as was the possibility of Donald Trump taking up residence in the White House. The coalition government was wrestling with how to mitigate the impact of RDR on the availability of advice, while pushing the merits of guidance as a solution. Pension freedom had just been announced, but was a mystery to most, while higher rate tax relief on pensions was considered as dead as the proverbial dodo.
Isas seemed a simple way to save and robo-advice was about to take over the world. North of the border, to the delight of its huge financial services sector, Scotland had voted decisively to remain a part of the UK and, on the stock market, the FTSE 100 stood at about 6,700 compared to its current 7,400.
One only needs to glance at these events to grasp what a difficult and changing world we are living in. Yet, throughout these tumultuous times, the basic needs of clients have remained unchanged. They need life insurance to protect their loved ones and savings to safeguard their future if they are to be secure from the twin dangers of living too long or dying too soon.
Little wonder that there is such a desperate need for financial advice, a need that is increasing almost by the day. Nothing could more clearly demonstrate the benefits to consumers of professional advice than the government's initiative of making it tax efficient to obtain holistic retirement advice, on condition that the money is paid directly from the provider to an adviser. This change goes live on 6 April. I believe access to £500 up to three times will prove only the first step on the journey to make financial advice wholly tax deductible. Nevertheless, it is an important step, which demonstrates that in today’s financial services there really never is a dull moment.
Ken Davy is chairman of SimplyBiz