Jane Wheeler, president of the Institute of Financial Planning, believes the fact more advisers are making the transition to a new advice model is giving the organisation momentum in its vision to develop financial planning in the UK.
Wheeler took up her position as president in October after spending 11 years as a member of the IFP and qualifying as a Fellow and a Certified Financial Planner (CFP) in 1997.
She began her career as an IFA but realised becoming a financial planner could be a lot more rewarding financially and in terms of developing long-term relationships with clients.
“I never wanted to be selling products, but I didn’t know I wanted to be a financial planner until I got involved with the IFP. I prefer planning because it solves the situation by looking at what the client’s real objectives are. The products themselves are irrelevant to some extent,” says Wheeler.
Although she thinks there will always be a place for commission-based remuneration, Wheeler believes the structure of commissions needs looking at.
She states: “Big upfront commissions can lead to bad service, which is not good for the industry as a whole.”
Wheeler admits the transition to fees-based advice is not easy, but she says there is a lot of help out there and advisers need to try and segment their client bank by working out which clients give them regular business.
She suggests the IFP is “doing the right thing” and the industry is at a tipping point in moving to a new business model because of the increase in consumer demand, adviser knowledge and regulation.
As a result, the organisation has plans for a big consumer education campaign which will demonstrate what financial planning is and how it differs from traditional advice.
Similarly, it is launching a competency profile early next year to highlight the skills people need to become a financial planner, which Wheeler says will be a useful tool for differentiating financial planning businesses.
She believes the main challenge facing financial planners is still about attracting the clients they want to attract.
Although regulation presents some difficulties, Wheeler says if people embrace it then it won’t be a real problem.
“Principles-based regulation is ideal for our way of working. Although it is quite scary that the Financial Services Authority (FSA) is not writing rules down for us, you can’t argue against the treating customers fairly principle,” she adds.
Likewise, Wheeler is confident the industry can attract young people into the profession through the government’s plan to introduce financial education into the school curriculum and through the fact Manchester Metropolitan University (MMU) has incorporated the CFP into its financial services degree.
She says: “We have already got our first batch of third year students on the financial services degree at MMU and there is a possibility of extending it to other courses. This will enable us to offer a proper career path.”
Wheeler says there are several member firms which are keen to employ graduates, but she recognises a lot of IFA firms do not have a salary structure in place and are not big enough to offer a position to a trainee.
She states: “In the new model firm it should become easier. Capturing the imagination of the graduates will be the challenge, but I’m excited by the reaction of graduates at MMU.”
Wheeler is also positive about the IFP increasing its membership, particularly as people are entering the industry from a range of other disciplines, which means they won’t necessarily come into contact with the Personal Finance Society (PFS).
“A lot of people naturally join the PFS because they take the Chartered Insurance Institute’s (CII) exams. But in the future this won’t necessarily be the case,” she adds.
But Wheeler recognises the UK lags behind other countries such as the US and Canada in terms of financial planning, as those countries have not had the same history of selling products.
“We have some catching up to do,” she says.
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Emily Perryman on 020 7968 4554 or email [email protected].IFAonline
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