Unbiased.co.uk’s media IFAs look at the year ahead
During the last year* Unbiased.co.uk, the professional advice website, dealt with nearly half a million requests from consumers looking for a local independent financial adviser. And with 2009 drawing to an end, Unbiased.co.uk, which hosts a free and confidential ‘Find an IFA’ search on its website, is looking at the year ahead and has asked its panel of media IFAs for their views on what 2010 will hold for the IFA market.
Karen Barrett, chief executive of Unbiased.co.uk, comments:
“2009 has clearly been a year of great upheaval for consumers and IFAs alike. We have seen trust in major financial institutions plummet, the base rate drop to a historic low of 0.5% and stock markets around the world have seen unprecedented turbulence. In the midst of this uncertainty, consumers are clearly concerned about their finances and coupled with rising unemployment rates and the instability of the economy, truly independent financial advice has never been more important.
“We believe demand for independent financial advice will remain strong through 2010. Changes to taxation, ISA increases and an uncertain mortgage market will only add to the need for advice on personal finance matters.
“Unbiased.co.uk will continue to promote the benefits of independent financial advice to the consumer and we expect referrals from our Find an IFA search to the 8,000 IFA branches on our database to increase over the next year.”
Trust
Jason Witcombe, Chartered Financial Planner at Evolve Financial Planning
“The key issue is trust. If consumers trust IFAs and want to use their services, the outlook for 2010 and beyond is a positive one. Trust can be built through increased qualifications and by adopting a fee based charging structure. The Retail Distribution Review has helped to focus advisers’ minds on these aspects. It can also be built by creating a service that relies on ongoing advice and client contact rather than a “one off” product sale. A consistent, low cost and easy to understand investment philosophy also helps clients to feel comfortable that the advice is in their interests and not their adviser’s.
One of the problems with financial advice is its intangibility. Because of this, it is an enormous leap of faith for someone to sign up to advice that could cost them several thousand pounds. As advisers, we need to encourage consumers to play their part in the process and properly understand why we are recommending certain products or strategies to them. We also need to offer services that engage a wider section of the population than we currently do.
Those advisers and firms who embrace such ideas should have a positive future ahead of them.”
Specialism
Marc Ruse, CFP Chartered Financial Planner at Fiducia Wealth Management Limited
“Consumers are becoming far more aware of the need for specialist advice. It is rare these days for the same solicitor to organise your Will as well as the purchase of your home. Financial advisers must become specialists as well – whether that is in investment management, lifetime cash flow forecasting or mortgages. That suggests that the era of the one-man-band is coming to an end and financial advisers will have to adopt more sophisticated business models to survive and prosper.”
Financial pressures on the consumer
Harry Katz, Principal at Norwest Consultants
“IFAs are going to be in great demand in 2010. Whichever government gets in we know we are going to suffer higher taxes. The future will look bleak with many people realising that they are going to have to do something to ensure they won’t be living in penury in old age.
Costs will rise – food and fuel in particular, but wages are not likely to keep up. ‘Rainy day’ saving will come up higher on the agenda. Returns from cash deposits will continue to be derisory and the banks will continue to try and repair the holes in their balance sheets – now increasing once again through credit card defaults. Jo Soap is going to feel under great financial pressure and will turn to the only people who will work on his behalf and help him through – his local IFA.”
Another challenging year
David Brunning, Managing Director at Brunning Newman Houghton Limited
“We expect 2010 to be another challenging year for the IFA sector. Early signs in the housing sector suggest that the mortgage market may fare better, although uncertainty over the final outcome of the FSA’s Mortgage Market Review may depress activity amongst lenders and advisers.
BNH is fairly confident that in 2010 the UK and wider global economy will confirm the early signs of recovery. However, retail client confidence always lags such recovery so we are unlikely to see a big return to retail client investment until the second half of 2010.
We expect the Structured Product market to recover from the collapse of several product packagers and try to regain a place in retail clients’ portfolios, but while institutional investors see their potential benefits many retail clients and their advisors will remain wary.”
A year of opportunities
Martin Bamford, Managing Director at Informed Choice
“With the Retail Distribution Review looming on the horizon, the IFA sector will be split broadly into two camps – those who have wholeheartedly embraced the changes and those who continue to resist this evolution. The former will enjoy the ability to properly articulate their value proposition to clients and professional connections. Those in the latter category will find life increasingly difficult; justifying their opposition to changes which are largely beneficial to clients. If they are not careful, they will do serious damage to their own reputations and the wider IFA brand.
The General Election should create exciting opportunities and drives client demand for reviews of Financial Plans, in light of taxation and other legislative changes. The new government is likely to bring with it a new age of austerity, yet for advisers who are able (sufficiently well qualified and experienced) to focus on Financial Planning rather than product selling, this means something truly valuable to offer their clients.”
All change in 2010
Frank Cochran of FSC Investment Services Limited
“I can honestly say that 2009 will go down in history as a annuls horribilus for the majority of IFAs, we’ve faced the fallout from the drops in the world equity markets, clients sitting for too long in perceived safe investments such as deposit type accounts, mortgages have become so scarce that only those who don’t need one can get one and on top of all that our own regulator is trying to cull our numbers by introducing the RDR in such a way that the ‘experienced’ older professionals are being told to pass exams and become even more regulated or lose the ability to trade in two years time.”
Investor confidence on the way back?
Danny Cox, Head of Advice at Hargreaves Lansdown
“In terms of investor confidence, we have already seen an improvement since the depths of despair in March. Recession fatigue is already being talked about - investors are simply fed up of the doom and gloom. A new Prime Minister may increase confidence, together with better summer weather and the World Cup. We certainly seem to have seen the worse of the financial crisis and the rise in unemployment is slowing. Inflationary worries are a concern as we head out of recession into a slow and anaemic recovery; however we hope the stock market, though jittery, will have a better year.”
Investment opportunities
Tom McPhail, Head of Pensions Research at Hargreaves Lansdown
“New media communication, online financial management and efficiency savings all create opportunities for those IFAs who are interested in evolving their business administration methods.
Investment Markets may settle down but it seems unlikely. Predicting the next source of volatility is by definition unreliable but contenders could include a Sterling or Dollar crisis, natural disasters, central Asian political instability, international debt default, final salary scheme defaults, a hung parliament in the UK, an energy crisis, or all of the above, consecutively or concurrently.”
Client centred service
Jason Butler, Partner at Bloomsbury Financial Planning
“I can see a great future for independent financial adviser firms who deliver a truly client centered service which is based on alignment of interests and a long term relationship. For customers I think, if they can find one of the progressive firms with spare capacity, they will be able to experience service and advice which will give them the best chance of achieving their goals.
I can see customers having fewer decent advisers to choose from as the implications of RDR cause adviser numbers to fall as a result of higher standards. This means that customers must be prepared to pay the proper level of fees for structured, qualified and conflict free advice. Otherwise they will need to deal with 'sales' based, restricted access 'advisers' who, by definition, can't deliver what most affluent and wealthy people in terms of advice. The future is bright, the future is top calibre, fee only, independent financial planning advice!”
The year of tax
Dan Clayden, Director of Clayden Associates
“2010 sees the introduction of a new ‘super’ rate of income tax and the removal of personal allowances from higher earners as the government looks to reduce the national debt. But an era of higher taxation creates a massive opportunity within the IFA sector as tax planning advice is needed more than ever for those affected. Tax wrapper selection for investments will become an even more important factor in financial planning, as the introduction of higher rates of tax will widen the effect on returns seen between the most and least tax efficient wrappers.”
*Unbiased.co.uk’s financial year runs from 01 October – 30 September
For further information on Unbiased.co.uk, the professional advice website pleases contact:
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Karen Barrett, Chief Executive |
Anna Schirmer/Jennifer Comerford/ Anna Moulds |
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Unbiased.co.uk |
Lansons Communications |
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020 7833 3131 |
020 7294 3682 |
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5. Journalist recommendations. The Blue Book gives helpful suggestions as to which Media IFAs other journalists have on their list of favourites. Each Media IFA profile has suggestions as to other Media IFAs you may find useful.
Notes to Editors
Unbiased.co.uk, the professional advice website
Unbiased.co.uk is the free and confidential UK-wide search service matching consumers with the most appropriate local professional advisers for their needs. In 2008, Unbiased.co.uk fulfilled over half a million searches for local, professional advice.
The portal currently houses three professional advice searches: ‘find an IFA’, ‘find a mortgage adviser’, and ‘find a solicitor’, and is inviting accountants to sign up for its ‘find an accountant’ service. These searches enable consumers to find relevant professional advisers by postcode, area of specialism and payment method, amongst other options.
IFA Promotion, the organisation behind Unbiased.co.uk, is now in its 20th year, and was set up to promote the benefits of independent financial advice to the consumer.
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