A raft of follow-up comments - following this morning's view of the IFA market - suggests many IFAs have yet to see the positives of industry reform.
Updated at 16:30 (24/6)
'Diligent' of Co. Antrim says:?p>
Well done "Seriously p!**$d off from Southampton", you have managed to put my exact feelings into words!!
I am 48 years of age and have been in the financial services industry for 30 years, managed to sit and pass my CII exams, started a small practice 18 years ago now and now have to employ two administrators to cover the workload of one IFA, ie me.
Profit margins have dropped through the floor as costs have risen through the ceiling. My PI cover is expensive and totally useless.
I had a claim made against me under the FSAVC review where I ended up writing a cheque for £500 to the Civil Service AVC provider, Equitable Life!! Go figure?
My working days have extended to 14 hours and I don't have time for friends and family thanks to the astonishing amount of paperwork and dross I have to sift through each day. My business income is exactly the same as it was in 1999, even though my case count has risen by roughly 42%. Talk about running harder to stand still.
Like "SP" I can't wait to escape this business, give me another two years and I'm off to spend my time chancing my arm making complaints as it seems to be a profitable business these days.
Well done again "SP" I, like you, look forward to a long and happy retirement with the hope that Saga will offer us run off PI cover at a special pensioner's rate.
Alistair Lyon of Credenta and IFA Direct, Woking says:
I agree with everything said by "seriously....off from Southampton".
But he missed out the bit about the absolute (scripted) lies being told by endowment and other complainants to support their vexacious claims for compensation.
If I had either the time or the money I would spend it on taking them to court (but would the FSA allow it?). If a complaint has been acepted as a "case" by the ombudsman (even if subsequently rejected) would the court hold it as read that if the ombudsman had accepted it as a case then it must have been a valid complaint, and rule against us automatically? That is the type of advice I have had.
We now have the government moving to compensate sufferers from final salary schemes from taxpayers funds and media and others pressing them to do more.
I know I am only a thick IFA, but if they can find the resources to track us down and force us to spend fortunes on reviews, compensation and other associated additional costs such as PI (only to find that not many of us did anything wrong anyway), why can they not do the same to these failing final salary schemes?
What the heck - if the law does not exist, create one and make it retrospective - there is a precedent after all.
Sorry - I got that theory wrong. We should welcome the precedent of the taxpayer paying compensation costs, and seek to join the same privileged club. That could solve our PI problems overnight!
And despite all that I am "marginally" optimistic.
'Hacked Off' of Hove writes:
I could not agree more with the previous comments and feel exactly the same. I too have just hit 50 but sold my IFA business two years ago and have three years left of my run off period before leaving the industry after what will be 36 years service.
I hate everything about the job apart from dealing with my clients of whom 95% are really nice decent people.
Regulation and red tape has totally stifled thisindustry which is in decline and will decline further. Most IFAs I meet at meetings cannot wait to get out if they could do so but are hampered by PI issues, retrospective reviews, etc and some cannot even give away theirbusinesses. Regulators and pen pushers are the growth industries.
The public will be offered less financial advice into the future as there will be very few IFAs to do so who will have to cherry pick only high net worth clients to survive. The rest can make "informed decisions" from decision trees or contacting unqualified advisers. Who will carry the can when these are deemed to be missold?
UK PLC is in a mess. The generation in their 20s and30s are not saving. Worse still, they are borrowing more than they can afford to repay if interest rates go up considerably. They believe the residential property boom will go on forever, their standard of living must increaseeach year, and they will never get old.
They need the help of a level-headed IFA to tell them the error of their ways and suggest a future strategy which will be achieveable. Trouble is they soon will not be able to find one.
If there are less IFAs there will be less product providers who in turn will need less staff, there will be less need (thank God) for all those pink and white financial papers and magazines each week where there is nowno time to read them.
There may be less need for regulators as there will be so few people left to regulate. The IFA will not be able to afford the FSA fees which are spread over only a few Firms and PI cover becomes unobtainable even with ridiculous excesses because every bit of business sold from 1988is potentially missold .
This is totally over the top...or is it?.
Keep me away from those dreadful people who refer the mess we are in as a "challenge", it's not - it's a nightmare for all concerned.
Brian Lentz says:
"The previous IFA comment (Wed 24th June, IFAonline, Optimism is still not apparent)is a stereotypical response I would think.
I was also not aware of folk on PIMS 2004 bursting at the seams with optimism, but instead a feeling of frustration that we, the UK Financial Services Industry, provide more in the way of benefits to the public than the UK Government does (who charges premiums in the form of tax to everyone but only pays out the few - and - changes the policy conditions as it goes along to reduce claims).
Despite all this, we have to put up with HM Government rules that prevent us doing our jobs... which is the provision of advice and, where applicable, products to fill a need.
I did notice a rising feeling of a tendency to ignore the government and it's pedantic double Dutch double standards and go back to doing our own thing.... putting the client first.
For my part I am saddened that all statutory regulation appears to have achieved is a greater concern for doing things right than of doing the right thing.
Ron Palmer says:
The content of the letter could easily be repeated hundreds of times from IFAs who have been in the business a few years.
Newcomers would probably accept the current state of affairs in the industry as routine and put up with it. These are the IFAs who 'had smiles on their faces' no doubt.
After 35 years in the industry I can fully understand where this understandably disgruntled IFA is coming from. I'm very happy to be on my way out instead of in!!
One Dundee-based IFA says:
P!**$d off of Southampton is correct: listening to a music on hold whilst trying to update client records through call centres is primitive and expensive for both providers and advisers.
IFA Stephen Rowlands says:
I agree wholeheartedly with the previous IFA and feel that unless confidence and the probable crash of the property Market / Boom happens then this industry is completely f&%£$d.
People are too busy seeing the negative aspects of our industry and none of the positives, and being TOTALLY encouraged down this road by the 'Which' Brigade consumer lobbyist which has become far too big for it's boots - and by this Big Brother Government who wish to appease everything & everyone all the time to get re-elected!
When nearly everyone in the UK in 20 years or so is on State benefits & the pension retirement age is the equivalent of 10% of average earnings, people will realise that we (IFAs) WERE RIGHT!
But by then, it will be too late, the state retirement age will be up to 75 and only the very rich or clients who have inherited without their parents going into care will be able to retire before they drop.
I hope I am wrong, but unless something changes soon and the FSA, Ombudsman & other anti-industry quangos get off our backs I feel it will be too late,and we will lose good advisors and firms for ever.
There is no new blood coming in to our industry (a bit like the situation relating to apprenticeships years ago) and we will have the same position in the future as now where you won't be able to get advice. Finding an IFA will be the equivalent of finding a builder or plumber - i.e. like gold-dust.
Also without some sort of client bank, who could survive nowadays with the huge overheads and burdens of retrospective compliance that we all face from frenzied wound-up clients.
I fear time is running out and with slashed profit margins, silly Menus (to appease the regulator) and reduced commission rates we IFAs are all an endangered species.
Let's hope someone in aAuthority sees common sense before long and realises along with debt, keeping up with the Jones's and general materialism of this day & age things have to be sold and are not bought!
Calling all the 'thirtysomething' or 'Generation X' IFAs. Where is your voice in this debate? Do you agree with the sentiments expressed this afternoon?
If you have anything you would like to add to this or any other story, either email IFAonline's editor or post your thoughts on the IFAonline discussion board.
All-day event on 24 April
Consequences could be more severe than in stress tests
AFH has six segregated mandate funds
Variable operating expenses