Enriching relationships

Last month, I spoke at Westminster & City’s ‘Implementing the RDR’ conference. From the nature of the other speakers, delegates and Q&A sessions it was clear that financial organisations are now very focused on making the significant transitions required: providers, platforms and advice firms.

I presented our latest adviser productivity research from last month, shortly to be published in a white paper “A problem shared is a problem halved”. In the context of declining initial fees (see Clive Waller’s excellent study), the need for the dramatically enhanced productivity in the front office is an absolute. Many of our clients are now saying; ‘Our people need to work twice as hard to earn the same’. Our view of how to achieve this is through three key strands: 1) greater use of technology in the front office 2) segmentation of the client base and the delivery of an appropriate proposition to each and 3) ‘sharing the problem with the customer’. This was written up by FT Adviser as “Advisers need to board the ‘Easy Jet’ trend”. Much snappier but the essence is right. Easy Jet and many travel companies get the customer to do more of the work before they deliver their service. So must our industry. Email me if you would like the full presentation.

There was a lot of interest from banks on Simplified Advice and on qualification levels in particular. The FSA’s view was that there are a number of advice regimes in existence already (advised, basic advice and non-advised) they do not see the need for another one. Furthermore, they feel there is yet to be convincing evidence that QCAL4 was not required for advisers delivering Simplified Advice on the basis of ‘what is it that is so different from full advice that would mean a lower standard of qualification is required?’ The FSA was clear that in the event that the Financial Ombudsman Service felt that ‘advice’ had been provided it would need to be reviewed in that context. They are open to the industry making the case though.

On this last point, we worked with the ABI & BBA on designing and testing a new Simplified Advice process - Assisted Purchase. It was clear from this research that customers did in fact feel that they had been advised. Peter Smith repeated the FSA’s view that simple processes were in fact allowable under the current regulatory regime and that if the process of delivery of advice was systematized then this represented an opportunity in so far as qualifications clearly don’t apply to systems. Clearly there are opportunities here.

Ben Goss, CEO Distribution Technology