The business of being a financial adviser has changed a lot in recent years.
Not only has the Retail Distribution Review banned commission and led to an increasing level of professionalism among advisers – even if an advice gap was the price which had to be paid. But like many other professions, technology has also played its role in changing the financial advice world.
For a start it means less paperwork and less waiting, but it also may mean greater demands from clients who are used to having the world at their fingertips – quite literally given the proliferation of smart phones – and may expect the same to be true for their finances.
The problem is this brings with it an increasing dependence on companies that provide the underlying technology, and when things go wrong they can go very badly wrong.
For examples of this you need only look at the problems caused by Aegon and Aviva’s attempts at replatforming. And we have now learnt that Tenet has also experienced some of the perils of moving from one technology provider to another. Its move to a new back office system prompted problems, with one adviser receiving income from investments that was unmatched, meaning he did not know which client the income was for.
To a certain extent some of this is inevitable – anyone who works for a company that has moved from one technology supplier to another will know these processes always come with glitches.
The stakes are higher in the financial services industry though, because savings are on the line.
For this reason it is imperative that the Financial Conduct Authority gets on top of this issue. The Treasury Committee recently said the regulator had more work to do on ensuring it had the capability to regulate this area.
An analogue regulator in a digital age will not benefit advisers or consumers.