PFS president warns advisers lack plans for their own retirement

Speaking to FTAdviser, Sarah Lord said many advisers had not planned in advance when it came to their own retirement.

She said: “We all know money is such a personal thing and often the client has spent many years working with an adviser, building complete and utter trust in that relationship.

“Changing this relationship to work with a new adviser can be a significant shift for clients as it takes time to build a rapport and trust. So, there should be a plan for transitioning the relationship over a couple of years but often that is not the case.”

Lord explained that while these existing relationships were important, it was equally important to focus on new generations of clients and build a clear understanding of what they want from the relationship they have with a financial planner.

“The intergenerational wealth transfer is upon us now, so we need to be on the front foot,” she said.

Attracting and retaining the next generation of financial advisers is vitalSarah Lord, president of the PFS

“We must ensure we are able to build appropriate client experiences for those new generations of clients so we sustain our client base as our existing clients, the traditional clients, pass the wealth on to the next generation.”

She added: “Only by securing our own financial futures through a clear focus on attracting fresh talent, building resilient business models and focussing on the client relationship, will the profession be well placed to help a growing number of individuals be empowered to manage their money and achieve their goals.”

Earlier in 2021, the Chartered Insurance Institute published its ‘Shaping the Future Together’ consultation to provide PFS members with the opportunity to have their say about the networking, skills and knowledge development they require from the body in the years to come.

However, the consultation was met with criticism by PFS members as the CII did not engage with the PFS board on the strategy prior to publication. 

Lord said she was looking forward to reviewing the feedback received from members and using that to shape the support it offers in 2022. 

She said: “In addition to considering how we best promote the value of financial advice to a changing demographic, there is also a need to explore and evolve training programmes, including those provided by the Chartered Insurance Institute.

“In the next 12 months, I look forward to reigniting conversations with our members on the vital role client relationship sustainability plays in securing the future of the financial planning profession.”

Reflections about 2021

Discussing the past year, she said 2021 would be remembered as a year when financial planners once again faced continued challenges and proved how resilient they are.

Lord explained the events of the past 12 months had shown how financial planners had ensured their business models were both resilient and flexible as many adapted to changing client needs.

“The pandemic created a fundamental shift in how technology is used, in business and by society,” she said. “We must continue to embrace technology – both to meet our clients’ needs as well as deliver efficiencies.”

In the past, it was often felt that clients only wanted to meet face-to-face but that had changed, she said.

However while more clients are more comfortable with virtual delivery, she emphasised there was still a need for face-to-face interaction. 

“As challenges such as downward pressure on fees, increased regulatory scrutiny and professional indemnity insurance costs continued in 2021, our profession showed we are clearly capable of taking action to minimise these pressures while remaining focussed on our future sustainability,” she added.

The future of our profession is one that embraces technology.

“At the same time, the pandemic has heightened society’s awareness around the need for financial confidence, and more individuals than ever are seeking advice.”

In order to meet the demand for the profession’s services, she said the PFS needed to be doing as much as it could to promote careers in financial planning. 

“As early feedback to the Shaping the Future Together consultation and my ongoing conversations with fellow financial planning professionals show, attracting and retaining the next generation of financial advisers is vital. 

“This is particularly important if we are to bridge the advice gap that is likely to widen as more professionals retire over the next decade.”

The PFS power panel

Furthermore, Lord touched on the “traditional client”, often described as the baby boomer, and said they were now looking for a human driven but technology-enabled experience.

“They want to access information through technology, but they still truly value human interaction,” she added. “By contrast, we are starting to see that the next generation of clients is looking for a technology-driven but human-enabled service.

“Financial planning professionals are working hard to get that balance right – harnessing technology to meet the business and client needs without losing the personal touch.”

Building the skills needed to strike the right balance between technology and personal interaction was an area the PFS Power panel was working on.

The panel consists of experienced financial planners who help shape the PFS Power CPD programme and assists with the creation of good practice videos, webinars, events, podcasts and articles for the profession.

“There’s no denying that the future of our profession is one that embraces technology to support the client journey,” she added.

“Faced with changing client needs and technology advances we must get even better at providing a ‘human and tech-enabled service’ in the year ahead.”

sonia.rach@ft.com

What do you think about the issues raised by this story? Email us on FTAletters@ft.com to let us know