I hope your 2018 is already off to a good start, it's only January and already this is a great time to look forward to the exciting opportunities ahead.
The first thing I want to highlight is the opportunity you have right now to help stop the grotesque injustice of the current system of Financial Services Compensation Scheme (FSCS) funding. I have spent many years campaigning for a review of the disgraceful way that advisers shoulder so much of the financial burden of the levy without any chance of stopping, or influencing, the firms creating the liabilities.
The Financial Conduct Authority (FCA) has finally accepted that providers, who really do have the ability to limit claims, should contribute, and are now consulting on the proportion. Critically, this consultation closes on 30 January and I urge you all to make your voice heard by submitting a response to ensure that 2018 brings the introduction of a fairer deal for advisers.
However, the consultation paper proposes a providers’ contribution of just 25 per cent, which is a wholly inadequate reflection of their ability to spot problem firms early and limit FSCS claims. I believe a much fairer split to be 75 per cent providers and 25 per cent from advisers.
The coming year will also see opportunities emerge from greater innovation across the financial services sector, particularly in terms of technology and product development. I expect to see increased innovation in the equity release and care markets, as creative solutions are developed to help elderly clients.
I believe we will also see digital guidance start to engage consumers, as advisers more actively harness technology to add efficiencies to their business processes. The combination of adviser relationships and digital guidance has the potential to deliver the benefits of advice to currently under-served consumer areas.
Of course, 2018 will also bring its challenges. We already know that it will be a particularly busy year in terms of regulation. For starters, we have Mifid II still to bed down, while some other big regulatory issues, including general data protection regulation (GDPR) and senior manager certification regime (SMCR), will need to be addressed by all financial advisers.
Throughout the past few decades of upheaval, advisers have consistently demonstrated their resilience and ability to cope with change. And 2018 will prove to be a year that brings far more positive opportunities for growth than challenges, and I confidently expect us all to be able to look back in 12 months’ time on a year of achievement and success.
Ken Davy is chairman of SimplyBiz Group