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A day in the life... of an RDR adviser
by Steve Buttercase on Jan 08, 2013 at 14:21
It’s a productive first day in the office under the retail distribution review for Steve Buttercase, who takes a sideways look at the impact of the RDR’s plans.
I’m very excited about testing my new phone software that automatically informs me which client segment incoming callers fit into.
It doesn’t take long before I get a call: ‘Mr Barnstaple – BRONZE’.
I check the file records. Mr Barnstaple has two small protection policies paying £2.62 per month renewals. This means, since I took over the agency, after deducting the expenses, he has paid for about seven minutes’ work: quick phone call.
I hang up on Mr Barnstaple and send him a Dear John letter. No room for clients like that in the new professional era.
I read through the VAT rules for the 17th time. I think I’ve got it.
Mr Barnstaple – BRONZE’.
I ignore the call.
Time to look at what the investment experts think will happen in 2013. One group says all eggs should be cracked at the pointed end whereas everyone else speaks for the more rounded end… Oh, wait a minute: that’s my Gulliver’s Travels e-book, which has no relevance to modern portfolio theory.
I successfully find two fund research companies’ websites, apply their stratified-sampling risk-adjusted obfuscation modeller on my highly personalised risk-assessed bespoke portfolios and produce a coloured graph that I cut and paste into Gulliver’s Travels by mistake. Oh well.
‘Mr Barnstaple – BRONZE’.
I ignore the call.
‘Mr Cashbox – GOLD’.
Hold everything: it’s a top tier client! I start my Outlook timer, clear my desk and practice speaking really slowly to drag this out as long as possible. I hope he doesn’t ask me to hoover out his car again, but somehow I have to get him to see the value of a 1% annual fee.
Mr Cashbox has read several articles entitled ‘Is your adviser really worth it?’ and wants to discuss remuneration. I agree to visit him. He says he has a list of questions he got from Money Box on Radio 4 and that rich people like him should be paying a lot less for their advice.
I’m trying to remember how my new client filing system works. I decide it must be ex-clients A-Z, Bronze A-Z and date order of review, Silver A-Z and date order by fee size, Gold A-Z and date of review by fee size and funds under management corrected for whether actively or passively managed, and whether advised, outsourced or ignored – largest first. So much easier!
Client meeting: risk assessment.
I attempt to explain the difference between risk, uncertainty, gambling and investing. The client refuses to answer the risk assessment questions.
‘I just want my money to go up, not down.’
‘In absolute terms or real terms?’
‘What’s the difference?’
‘Well, your money could go up in absolute terms, so it is worth more than it was, but because prices have gone up too, it can’t buy as much. So it has gone down in real terms.’
‘How can it go down as well as up? I thought that was shares.’
‘No, er, yes... but not in your case.’
‘So how do I avoid the down bit but keep the up bit?’
‘By investing in things that can keep pace with inflation.’
‘Well, shares, for example...’
‘They go down as well.’
‘Well, yes, they do but…’
‘I want my money to go up with the shares but not to go down with them. Can I have that?’
‘No, well, sort of… er…”
‘What’s my attitude to risk then?’
‘I have absolutely no idea... Coffee?’
‘Unknown number – uncategorised’.
It’s Mr Barnstaple: he has beaten the system. He didn’t get a chance earlier to tell me that his wife has passed away and he has just heard he has a critical illness and wants to claim on his policy. Can I help? That’s more like it!
I get a call from a pleasant young lady who claims to be from the regulator. She expresses concern over the content of one of my recent press articles.
I explain that sometimes my articles are designed to be satirical and not to be taken too seriously. She doesn’t sound convinced.
Steve Buttercase is financial planner at Sense Financial Solutions