Chris Daems: Is this the winter of discontent or should we be looking on the bright side?

In our office, mere weeks after paying corporation and personal income tax bills, along comes the day when the professional indemnity renewal email metaphorically lands on our doormat.

The email that accompanies it from our broker is almost apologetic and cites 'tough market conditions' and provides links to a range of articles highlighting how difficult the market is right now with insurers appetites for insuring IFA's waning faster than an "I'm a celebrity…" camp mate presented with a plate of less than appetising jungle critters.

Then there's the periodic FCA fees to be paid, a tough recruitment marketplace for support, the challenges potentially facing firms with a large amount of DB transfers and for firms with self-employed advisers the potential challenges of IR35 coming down the track.

However despite all of these challenges I'm reminded of the entire phrase from the famous Richard III speech: "Now is the winter of our discontent. Made glorious summer by his son of York."

You see, in this particular speech, ole 'Dicky wasn't moaning about his previously poor luck, but actually optimistic about the fact that his brother was becoming King.

I feel equally optimistic. Not about my brother becoming King, which is highly unlikely as he's probably about 48 millionth in line, just behind me, but about the future of our profession.

We continue to grow at a decent rate, attracting more of the right type of clients than ever before. We're using technology to make our systems and processes more efficient, but also to add more value to our clients. We're continuing to be more profitable year on year with margins not changing fundamentally despite some increased costs in some areas.

The conversations I'm having with many of firms like us tell me we're not alone. 

So what are we all moaning about?

The challenges of many business involve changing commercial environments, shifts in buying trends, income volatility, margins being squeezed, a constant need to acquire loads of clients and much more.

Running a directly authorised financial planning business certainly involves some challenges and it's important we're not complacent about working hard to ensure continued success. 

However, while many of the challenges we face are unique to our profession, we've also got a model, which should be pretty robust over the longer term, simply by doing the right things consistently and constantly focus on improving what we do.

Also, while the present looks pretty positive, the future for financial planning businesses look really exciting. I'm certainly enthusiastic to see what happens in the next 10 years. 

There will certainly be some significant changes - some for the worst - but I'm optimistic the majority will be for the better and provide advisers with more time to do what they do best: coach, guide and support people to live the life they want. 

I do think that advisers who believe that 'product intermediation' is where we add value will lose out but I'll save that thorny topic for a future article.

So, the present may be challenging but the people I talk to in firms like ours tell us that they share our experience. 

Business is also pretty good, so maybe we should follow the advice contained in another work of theatrical genius, this time captured in celluloid and not on the stage, and... "Always look on the bright side of life…"

Chris Daems is director of Cervello Financial Planning

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