More IFAs reach certified status…

Positive development to begin with-according to Money Marketing, the Institute of Financial Planning has announced that 900 Advisers have actually achieved the Certified Financial Planning License, with these numbers looking to increase to 1,000 in quarter 1 of 2009, currently 20% up on 2007.

I think this shows that there are many Financial Planners in the UK that actually want to develop themselves to be able to give high quality advice, and are responding well to the “sea change” in Financial Services. We forget that for every Financial Adviser who resists advancing themselves technically through whatever route, Certified, Chartered, AFPC etc…., there are numerous individuals who want to self-development swiftly through these outlets!

Over to Life Office World……Standard Life have announced that it is to cut 37 jobs in their marketing team in order to “refocus” their marketing strategy going forward, through redundancies by Spring of 2009.

This trend, in my opinion, is continuing, until F/S Life Offices see business volumes recover, as the downturn bottoms out and comes back up the other way. I think Financial Services was affected early by the downturn so logically will recover earlier: 2010, quarter 1, will see fantastic volumes of Life, Pension and Investment products (you’ve heard it here first)!

Onto the Networks, Sesame is poised to acquire Premier Network Group’s final remaining 37 appointed representatives. This move was confirmed by Director Paul Fisher of PNG, after a meeting in Derby, last week.

All sectors of Financial Services, are either streamlining, announcing redundancies, being “swallowed up” by bigger firms, banks or networks, for security in these dark times! I wonder how many absolute Networks will be left after 2009.

Also, on Networks, Prestbury has been hit with a winding up order, last week, as it’s been unable to pay creditors, mainly due to the fact that its members have been unable to pay
themselves. This problem has been intensified, since it agreed to transfer some of its members/ARs across to Personal Touch Financial Services, as some went to other Networks, or some didn’t meet Personal Touch’s criteria!

There are certainly, ripple effects, at work within the IFA/FS market at the moment, Prestbury are owed £360,000 by their members and hence have a cash flow problem to pay their creditors, and hence “wind up” orders are proposed! With Business Volumes falling for ARs and Network Members, coupled with P.I costs, and enhanced time needed to meet RDR and Capital Adequacy, they them struggle to actually pay their levy to their Network or holding company!

Banks and IFAs continue to grow through aquisition…

The Parliamentary Ombudsman, Anne Abraham, has been supported by the MPs on the Public Administration Committee to compensate clients of Equitable Life who have been “miss-sold” Pension and other Product in the past, and to look into the way these investigations are conducted in the future.

My thoughts are, with Fee-based IFA Practices, growing the future, and IFAs effectively charging for their time, and not the sale of products, “miss-selling” or the hint of such things, will reduce greatly, moving forward. This development has been amongst controversy, that the Government have delayed making a decision on victims of Equitable Life “miss-selling” until after Christmas.

More news on the IFA Acquisition trail, as Towergate has acquired Russell Plaice & Partners…… and RP& P, an IFA Practice based in Lincolnshire will be re-branded as Towergate Russell Plaice. Towergate are showing an extremely strong growth plan in a down turn, with this being the 9th acquisition in 2008, posting a formidable total of Advisers to 95 across the entire group! Ian Darby, Chief Exec of Towergate, said this was an excellent addition to their group, as RP & P, are a successful practice with HNW clients……

Each week, I come across the exact same story, the Banks aren’t the only animals taking smaller ones under their wing, in the IFA market, and this has never been so prevalent. I think the reasons are numerous ; the effects of RDR, and IFAs deciding to leave the industry, and smaller firms not being able to financially survive in the Market place, or even, small, but successful Practices, like above, securing their future by linking up with a larger firm that will support them to further success.

Acquisition isn’t just limited to firms, as James Hay have proved…They have added Cazenove UK absolute target fund into their wrap platform, bringing their total fund choice to 1,373 through 59 different providers. This addition to James Hay’s wrap proposition, offers a neutral stance on short and long positions, and doesn’t resemble the market, and Chris Smeaton, Head of Funds, stated that they can offer a wide range of Investors, a wide variety of Fund and Investment choices.

Again, I’ve seen this more and more, “cash is king!” is a true saying, at the moment, and IFAs are offering better choice, better quality of advice in general & a better service than ever before, to attract a portion of that liquidity. Furthermore, I think, IFA clients are in a strong position as to where and, with whom they invest their monies! Never, has the IFA Market offered better choice to potential clients, and ones that have been in situe for years.

Back to the Banking Market, as anticipated by some, Santander, are to axe around 1,900 staff in 2009, mainly from back-office roles within Alliance & Leicester, Bradford & Bingley & Abbey Savings Arms, as it looks to streamline and combine & integrate the various Products into one brand. Maybe, 6 months behind their rival “super-bank”, HBOS shareholders have voted yes to the merger with Lloyds TSB to start in 2009.

So what implications does all this have for Financial Adviser & Wealth Management Roles within the Uber Banks in 2009? One word, I think “uncertainty”, certainly in a recession, it logical to think that there is less Investment and Financial Planning Business within the Bank Balances, and as these two giants are looking to amalgamate their products, redundancies in Financial Planning roles, I think, is a distinct possibility….

IFA Market Place absorbs RDR & Capital Adequacy Standards…

Interesting development, Standard Life have bought their way into a minority shareholding of RSM Bentley Jennison FM Group to aid their distribution of their Life, Financial Planning & Wealth Management. Tony Stockdale, Managing Partner of RSM BJ, said it was a wonderful tie-up and allows them to accelerate their growth plan.

In my opinion, this type of tie-up will become more and more common, especially in these uncertain times. I think Life Offices, and Banks have to “spider” their distribution chains, as these Wealth Management Firms have the reputation for quality advice that can add credibility to them.

The FSA are taking action to improve the quality of advice given to Pension clients, switching into SIPP and Personal Pensions, as they discovered around 80 cases of miss-selling, whilst reviewing 30 Firms. Furthermore, the FSA will be writing to around 4,500 firms to set down minimum standards of advice for Pension transfers, followed up with assessments in Q3 of 09 & further action against non-compliant firms.

I think this is important, and that clients should be looked after re-the quality of advice given, but it would be refreshing to read an article about the FSA that shows them trying to help their members grow their IFA businesses and secure IFA jobs for the future, through maybe working with members in order to develop professional connections such as Accountants & Solicitors etc…., here’s hoping aye!

More FSA News (I suppose they are the regulators), apparently several members have expressed concerns over the merger between the Cheshire & Nationwide Building Societies, in terms of their combined deposits exceeding the max compensation amount through the FSCS.

The FSA will be looking into this, but I think these mergers are simply “par for the course”, and dotting the I’s and crossing the T’s, are secondary to the main protagonists, as their main priority is survival.

A bit of a sad story, the Capital Adequacy Standards of the RDR, are already impacting into small IFAs across the country, i.e.-doubling the minimum cash reserves of IFAs from £10,000 to £20,000, and pushing some out of the industry. One x-sole trader mentioned, Tony Catt suggested that these reserve requirements have already made him transfer to a network as an Appointed Rep, and that these requirement, although being fair, wasn’t sure whether they were actually necessary, and that this would lead to the FSA chasing round 20 huge IFAs, rather than 5,000 small firms.

What does all this mean for IFA Jobs going forward? Maybe some members won’t join networks & simply drift out of the industry due to RDR. I fear, that every “cowboy” IFA, RDR pushes out of F/S, there will be several honest, decent, IFAs that will leave the industry as well.

On Thursday, the Monetary Policy Committee reduced base rate again down to a new low since 1951, and with LIBOR plummeting also, there is very strong pressure on the Banks/Building Societies to pass this onto their members through reduced Mortgage rates, to kick start the overall Economy.

To me, there’s a trade-off here, and some feel that prudent savers are paying the tab for excessive borrowers, but what is the alternative? The fact that if the mortgage market gets going again, other industries will follow such as construction, etc…., its vital that this process has to work, but I do sympathise with IFAs who have to explain to their clients that long-term Investments are what the term suggests-Long-term, and their will be a bit of turbulence along the way, but that the clients monies will still reach their destination!