Financial advisers should be thankful for Brexit.
Compared with the rest of the economy, which is stuck in a regulatory no-man’s land wondering what the trading landscape will look like when the UK leaves the EU, those in financial planning have had a relatively long period of stability.
You may disagree – the regulatory landscape is always shifting. But think for a moment about the upheaval of the past 20 years.
Even in the good times – pre-RDR, pre-Sandler review, and before the financial crisis – the rules were constantly shifting.
Tax bands changed almost annually, pension allowances were cut (dramatically in some instances), investment products and reliefs were introduced only then to be axed a few years later.
And then alongside this there were the toxic hangovers of split-capital investment trusts, and with-profits and pensions mis-selling, which created a distinctly unhealthy environment to have to sit down with clients and persuade them to invest in their retirements.
Since the EU referendum, the Treasury and regulators have been far too busy drawing up plans for the future of the UK to worry about the micro details of the economy, and it is the banks that have been behaving badly.
Frankly, chancellor Philip Hammond is far too busy to worry about the future trade tariffs to ponder pension tax relief.
That is a blessing. The greatest threat to financial planning has been the tinkering of chancellors over the years. How on earth can you plan for the long term, when every year the goalposts move?
The current stability does not mean it has been an easy time for financial advisers. In a climate of uncertainty, it is an enormous challenge to get clients to focus on the future. Who wants to start a retirement plan when the tone of some in the nation is of impending economic collapse?
But as with so much at the moment, you have to strip out the mood music and concentrate on the hard facts.
Our stock market may have underperformed the US where bold policymaking has pumped up returns, but the UK has demonstrated a certain healthy robustness. Much of the doom for individual firms is more about out-of-date businesses, and badly run ones, meeting their demise.
Besides, what better opportunity to pitch the importance of independence and personal responsibility – that you cannot trust anyone else with your future – than when politicians are busy demonstrating they do not know what they are doing?
So be thankful for the Brexit impasse. It will not last for much longer.
Equitable Life’s demise is of its own making
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