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As I travel, and I seem to be doing more and more in recent years, I regularly talk with advisers, compliance professionals, regulators, institutional managers and other service providers in several countries. |
I am just back in Oz from a trip that included the US FPA conference, several conferences in the UK and a short visit to our business partner in Germany. All in all I was away for over eight weeks. As you might imagine, after discussing the cricket, weather differences and my jet lag, the conversation invariably turned to what is happening in the advice market. In this regard the UK is perhaps the most interesting place to be at the moment.
The UK is suffering from RDR fever. After several generations of commercial activity typified by careful and incremental decision-making the vast majority of the financial services supply chain is struggling with quick decisions requiring rapid implementation. In adversity there is opportunity. Over the next while I would happily wager that while there will be many mistakes, there will also be several careers and businesses made.
While in the UK I was involved in a number of investment-suitability activities exploring the integration of the adviser/client ‘risk conversation’ with other components of the supply chain. I describe this as the move “to develop a consistent risk language and process across the chain”. The intent: to comply with new regulation, help make advisers’ jobs and investors’ experiences just a little better. I was involved in:
- a series of ‘house full’ workshops with threesixty, probably one of the most influential advisory support groups in the land, around their advisers’ investment proposition,
- a number of intriguing discussions with a High Street bank where the executives use the language of advice as we do,
- discussions with several of the more ‘energetic’ fund managers around linking our explanations of risk into their public communications. One is in final draft stage and should be released very shortly,
- negotiations with a major investment product information supplier to provide a ‘see through’ to the underlying asset groups to match our Growth and Defensive split,
- conversations with almost all the major suppliers of cash flow modelling tools in relation to either creating or enhancing existing links between us,
- suitability clinics in Manchester and London in conjunction with Voyant, a financial planning platform. Very pleasing were the large number of fund managers, platforms, RDR consulting groups, compliance managers and other non-IFA attendees. Bob Freeman, from Voyant, and I put the clinics together at very short notice towards the end of my trip and, to our delight they were almost immediately full,
- the number of ‘discussions’, I am not sure what you call dialogue on twitter, in relation to suitability and associated issues. I am a new tweeter and enjoying the process thoroughly. You can join the discussion at @paulresnik.
What I can share is that there is a growing desire, particularly in larger organisations, to have a robust, replicable and defensible investment advice process. Simply put, they are looking for a consistent method to deliver investment recommendations. They understand that they need to provide investors with some certainty that there will have cash available to meet living costs over their lifespan. For wealthier clients, certainty revolves around the size and dispersion of their estate. The critical issue is to have a sound process for reaching investment recommendations, which is properly documented for each investor.
