In the final blog responding to “This is Money” I want to talk about villains and the future.
Let’s talk about villains
So say we have this sea of orphan clients what will happen. I believe there will be a whole generation that won’t have access to advice, but I also think that many people are so focused on saving money on things they buy that actually they go about investing in the wrong way.
I can say with confidence that although many direct platforms talk about tools to help clients they don’t really help. As can be seen in this article the focus is on costs and products when actually whether advised or not the focus should be on goals. I don’t see the largest provider of direct products pushing this.
When I buy shares or funds I do my research and certainly for shares I have a target price, this doesn’t mean I sell but I reassess my position. Of course I do get it wrong sometimes but I try to be a patient long term investor. I have a get rich slowly strategy.
If we want to know how to make it work then the focus for the direct side needs to take a leaf from financial planning i.e. its less about the product its more about the goals. When you have you your goals then you can do your research.
I can research funds and investments but certainly for funds I want to talk to the fund manager, to the team and I want to talk to others because only then can I get the feeling that this is right for me. Research tools or marketing articles are dangerous because they can sell you what the person wants you to buy.
So the villains really are those who may mop up these orphan clients but provide no true help to them.
Let’s talk about the future
I met someone before Christmas and he gave me a reality check, I hear platforms saying they are the best, I hear direct platforms so they will dominate the market, I see what journalists write and the one thing that this person said was that one thing that is certain post 1 January 2013 is that nothing is certain. So by this we assume clients won’t pay because we present it in a way that clients will not pay, we assume clients will be orphaned because of the way we package the fees, we assume the direct market will mop up clients and we assume that the proposition is all about products and costs.
Actually we need to take a step back and perhaps do a little more digging and really understand what is out there. My view going in to 2013, and beyond – I believe that the financial planning world is in good shape and those who have adapted to the changes will work well with clients, I also believe that there are financial planners who have models in place for lower value clients. Controversially I think that the direct platforms that are dominate today may be too big to adapt to the changes needed and it will be others who take the crown in twenty years’ time