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“Change or Die” That’s the message for many advisers
Change or die – the choice is yours. With the economic downturn really starting to bite and likely to get worse before it gets better most advisers are faced with this stark choice.
On 25th November, the FSA reports on the next stage of the Retail Distribution Review (RDR) process. When we add to this the fact that we are now experiencing one of the biggest global financial crises in living memory, then it is clear that many businesses will be facing difficult times ahead. For many advisers and Financial Planning businesses, the next few years will involve considerable change if they are to survive, let alone compete effectively in this new environment.
The new economic environment post RDR will demand that firms and advisers do the basics well. 12 months ago many still resisted the need to get off the up-front commission treadmill because they were doing enough business to avoid some of the more difficult issues that change would mean addressing. Well, if that was the excuse then, what is it now?
Many advisers rely on the annual management fees from client portfolios whether they are using a wrap or otherwise. With stockmarket falls of over 30% seen in just the couple of months since the summer, the decline in portfolio values will similarly mean a hefty decline in income for the firm by way of reduced management fees and trail. Normal market ups and downs can be tolerated, but falls of these levels have not been seen for over 20 years. Firms costs need to be reviewed and for many action will have to be taken. If these market levels are to persist then firms will have to make some very tough decisions just in order to survive. There will be some who will not be able to do that.
Such times of turbulence can often present the best opportunities for those firms who are prepared to adapt to gain competitive advantage. It is at times like these when a strong business model comes into its own. Where fees are paid for the planning process, the business can progress smoothly, knowing that the need for planning is not dependent on sentiment and market conditions. It can provide the consistency that is so important for good businesses to flourish.
For business managers or owners who haven’t quite got all this in order, or are trying and stumbling, then IFP and FP Advance are jointly running in November/December a couple of one day conferences in London on 26 November and Manchester on 9 December. The London date will be the first opportunity to get a clear understanding of what the FSA’s proposed RDR changes are going to mean. Leading speakers will be able to provide the answers firms might be looking for to achieve change.
Sessions from Nick Cann, CEO of the IFP, William Tolmie, RDR Associate at the FSA, as well as experts from Tilney Investment Management and KPMG will provide useful information and guidance for firms. Brett Davidson of FP Advance, well known for his clear thinking and forthright views, will be presenting three sessions all of which relate directly to helping the business to grow and to deepen client relationships. Come and refresh your thinking so that you can survive and prosper going into 2009.
For full details visit www.financialplanning.org.uk/postrdrconference
Author: Philip Calvert
Posted: Wednesday, October 22, 2008 | 6:01:36 AM
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