I have heard it argued that the most effective way to save pandas from extinction would be to find a way to make burgers out of them.
If there were an easy way to generate an ongoing revenue stream from pandas, beyond charging for one-off trips to the zoo, someone would soon find a way to make the bloody things breed.
And so it is with advisers. If we want to ensure their proliferation, we need to find a way to prove their inherent value, show people that advice can provide a tangible benefit that people will appreciate and pay for.
The surest way to enhance the reputation of advisers, increase business and make it a more attractive option for young professionals in search of a career, is to ensure it is seen as valuable.
While anything that reduces the regulatory cost would help existing advisers do the business they currently do more cost-effectively, it won’t bring advice to the wider audience it needs.
I believe the RDR has improved the professionalism of the industry, but it has also cut off a lot of individuals from receiving any advice at all, so that improved service counts for little when it comes to the masses.
To put it more philosophically, if a financial adviser delivers a good financial plan in a forest, but nobody is there to take it, is it still good advice?
What we need to do is get these people in front of an adviser so they can see first-hand the value an adviser can provide.
Retirement is an ideal opportunity to do this and as such it would be more beneficial to advisers if George Osborne used next year’s Budget to undo his backtracking on the diminishing guidance guarantee, and impose a 15-minute chat with a proper adviser on all retirees at the point of retirement.
Of course, in an ideal world, he might announce both, but an improved reputation for advisers – which the man in the street had practical experience of – would be the biggest step to improving advice, making it a more attractive career option and increasing the numbers of advisers and consequently the number of people benefiting from their advice.
That could be achieved whoever was responsible for regulating it.
