Advisers to take life planning to the mass market with Project Eve

"they will take place across the country in Birmingham, Manchester, and London" - this will be the contry of England then! What about Scotland/Wales & N.Ireland?? Are there no consumers here?

If you're so worried why don't you pick up the torch and carry on their good work there?

Stop moaning, they're doing a great thing. Great initiative and good luck to them.

We would love to take these workshops all over the UK and if there is enough interest we will do so.

Of course we need to start somewhere........

We are very excited about this work and we hope it will make a real difference to consumer perceptions and expectations, with a knock-on effect that benefits us all.

As of this week there are two Registered Life Planners in Birmingham / The Midlands (Luella Keeley and myself).

We need Life Planning available to all and we are doing our bit so come on the rest of the UK.

Who's moaning, merely a comment as the "country" isn't just restricted to Englandshire!!

Many congratualtions on your initiative. Best of luck! I'm sure the audiences will be inspired by your passion and enthuisiasm. More of this please.

Excellent and very positive. Glad to see you will possibly venture outwith England in the future.

This sounds great. Congratulations for taking this step.

Sounds a good idea. We certainly don't have many high net worth clients, but are still rolling out our services to Clients for Lifetime Cash Flow Planning as it doesn't matter how much you have, a plan is still important. To keep costs down for less affluent clients, it is the frequency of the plan review that we are adjusting.

To anon 1, my understanding was that England was a country and the United Kingdom is the Nation. If someone asks me what county, country Iand what nationality I am, it would be Kent, England, British.... You could go several steps further and look at the legal side and it would then be International Law, European Law, United Kingdom Law, English Law and then local byelaws in Kent and Thanet District Council. So I can be equally as pedantic as you have been over this positive plan from this Life Planners (who I have never met)

Well done you! This is just the right sort of thing we should all either be doing or supporting. As a small one person firm I probably need to support - how best to do it other than the obvious one of publicity: that I shall do and am just grateful that almost for once there are few moaning minnies out there. Often, too often for me, bloggers have negative comments when this one almost demands congratulations. Well done indeed.

A very good and much needed move. I should just liek to point out, though, that Dennis Hall's company is called Yellowtail (www.yellowtail.co.uk) not Yellowfin.

At www.altiorvita.co.uk we believe that Financial Planning, done correctly, needs to be about your life first and your money second. After all, how can you make the right decisions about your money until you really know what you truly want out of life?

The best laid plans of men gan aft aglay(Robert Burns)

Best of luck. This is exciting and a great move!

Good luck, it will be great to hear how it goes.

This initialive must be congratuated. As Phil Castle states above, not just HMW clients but everyone could benefit from a life plan. Developing a viable mass market life planning process has been the challenge though. Project Eve can only help make it possible.

I am pleased to see, for a change, that there are so far few negative comments. The concept is good and one which I have followed for some years but there are a lot in our industry who won't be able to adapt. Life planning is very rewarding but a long term investment of time and not for those who want to make a quick buck.

Hearty congratulations. Without this commitment from IFAs willing to invest their time, this vitally important sector would be missed. It is worth remembering that a significant number of HNW clients come from this area.

I like it, in fact I like it a lot. Good for them, everyone can benefit from some financial planning so why shouldn't they? More positive news like this is just what we all need in this industry.

Fantastic initiative which IFA Life is delighted to endorse. It will definitely go a long way to making the financial advice profession more attractive, more appealing and perhaps more relevant to today's consumer.

IFAs may want to join the Project Eve Facebook group at http://bit.ly/cEs0b2

Plus on IFA Life at http://bit.ly/9329Tk

Philip Calvert

Bless you all for the enthusiasm being shown for this initiative that is extolled in this blog, but one thing I have learned about the majority of the public, they like to run their own lives and the majority don't want to discuss their "life goals" with advisers concerning matters which are unconnected to their money.

As for this type of financial planning, the costs to a client of going into so much detail to product a report for a fee, would in most cases put them off from even starting as, for most ordinary middle and lower income groups, they need to survive the onslaught on their incomes from the normal expenses of daily living and government failures to control the economy and the banks, than worry too much about whether their life goals are realistic or achieveble, what happens when you identify that the client has little or no chance of achieving their ambitions, that would be the death knell of any future relatiionship.

Living too long, dieing too soon, getting sick and unable to work and / or not having enough income in retirement, all involve isloating how much spare disposable income they have after living expenses etc.

As for cashflow forecasting, I tried that for myself, trouble is, if the money stopped coming in the master plan failed, as it did some years ago, when I went through what I call my dark time. At that time there was no way the masterplan could be put on track and I ditched it, favouring a more relaxed attitude to life and enjoying more simple pleasures, fell walking, my garden, just being together in a warm comfortable home, was infinitely more superior than striving to achieve the impossible.

Many more people are going to go through the dark time in the near future due to the spending review and it is more important to ensure their protection plans for accident, sickness, critical illness and / or unemployment are inforce, affordable and will do what it says on the tin, than looking at lifestyle planning, but for those plans to work, clients need to protect their income and family first, after that all is variable.

I think sometimes we take too much on ourselves as financial advisers, we need to focus on the real issues and that is outlined above.

Take care of those and you won't have complaints about your services.

Just read this piece and have been bowled over by the wave of positive comments - even those that who are a little more sceptical about its impact are at least wishing us well.

I want to respond to Ned because I think he raises some very valid points.

I have empathy with his view because in my experience drawers, cupboards and filing cabinets across the UK are stuffed with unused financial plans, cashflow models and portfolio recommendations - and there is a huge swathe of the population that are never going to achieve financial independence as a result.

One answer, and it is only one answer, is to engage differently with those members of the public that are interested, in the hope that we can create sufficient enthusiasm and engagement in their financial plan, that they stick to it. And if things go wrong as they did with ned, that they revisit the process, even if the outcome might change.

The least we can do is give it our best shot, and if that changes the life of just a handful of people, we will have made a difference.

I would also like to say that there are a bunch of other people we've managed to rope in to help us get this off the ground - not least Phil Calvert and Jaime Steele who have been helping us with techie and marketing stuff. And in a further development we hope to create a charitable arm, and here we are being advised by our contacts at UBS.

Ned,

You state that "Living too long, dieing (sic) too soon, getting sick and unable to work and / or not having enough income in retirement, all involve isloating how much spare disposable income they have after living expenses etc. ". But of course, they do. Its the same with any new commitment we take on isn't it? It all has to be paid for out of the same, limited pot. The point is to make sure that we guide our clients on the effect of the choices that they make.

One of the things I find about about cashflow planning is that I can use it as a more engaging tool when discussing the 'protection' needs that a client has. I remember, as I'm sure many others do, the old metaphor about insuring the cashpoint machine and it remains valid even now.

What cashflow projections allow me to do is to demonstrate to clients even more graphically the effect of losing income - through redundancy, ill-health, death etc. - and thereby let them make a more informed decision as ot the amount of their available budget that needs to be put towards 'protection' rather than savings or pensions.

On a wider note, you make an interesting claim regarding "the majority of the public".

People I have met (not just my clients) have goals which include:

* "giving my children the best start I can",

* "trying to help my grandchildren at university",

* "being able to retire early and spend more time with the family",

* "travel and see more of the world before my health stops me",

* "take a year out and teach in a school in Malawi"

None of these are totally unconnected with money and I'd struggle to find many that were.

This is the reason that I find planning that includes a close look at cashflow useful. Its not an exact science, but it makes it more relevant than accepting that someone has "£xxx to invest for the medium-long term." I guess that for me on a personal level, the accumulation of wealth is not a valid end in itself, but its more about what that wealth would allow me to do and this is the direction of the conversation that I have with prospective clients.

I am delighted to be part of the team working on the web side of this project.

Before setting up my agency I qualified as a Registered Life Planner so I really believe in the project and understand the real benefits of life planning.

I am seeing more and more IFAs coming to me to ask for video and site redesigns and nearly all of them want to focus on goal based planning - I think it's catching on!

See what else we've been up to here - www.flemingsteele.com if you like golf you will love it!

As I said previously - "the best laid plans of mice and men gan aft aglay"

We can of course purchase wonderful all singing and dancing software, such as the Prestwood system and others, but at the end of the day, most IFAs are in the middle income market (poor people have little chance of saving in any event) and using a cashflow forecast could, I repeat, could be useful, but the time spent on doing all that and the fees necessary to be charged to the client regardless of any product purchases, is something a major portion of the public do not want to pay for.

A recent article in this weeks Money Marketing clarifies the issue of the publics mindset, a major portion of those canvassed for their opinion said that they would not pay more the £50 per hour for financial advice. To sustain a business in this sector takes a damn sight more than that when you consider the time, travelling costs, office staff, regulatory costs etc etc.

The RDR is going to make a lot of existing IFA practices both unsaleable and uneconomic and unprofitable to run if that is what the public is willing to pay for Independent Financial Advice.

What price advice then ?

Maybe the banks can work something out.

I am not against an increase in qualifications, god knows at 61 it is bit harder to progress these than 20 yrs ago, but I will get them, but the negation of commission options for clients on investment business will result in Customer Agreed Remuneration charges being loaded onto investment plans to the detriment of the initial sum invested, never mind the bid offer spread and other AMCs, clients will eventually be less well off than at present and will pay the price for that

Re - Cashflow - easy calculation - net weekly wage, times 52 = net income, less expenses = disposable income.

THen and only then can you assess whether goals are achievable.

I once visited a client to do some pension planning, prepared a full analysis of his current situation, an assessment of the likely outcome of his current plans and used a propriety pension calculating software package to assess how much he would have to put into his pension for 25 yrs to be able to achieve a standard of living equivalent to his current standard.

Treble checked all the figures and it turned out that if he put his whole net disposable income into a pension plan, he could only expect at best using standard annuity rates, an income of around `1/3 of current.

He decided not to proceed and stated that it would be more preferable to have his lifestyle now, than plan for an event which may not occur.

I sold him a Whole of Life Assurance plan just in case he didn't make it to retirement

YES I SOLD him a plan, on the basis that it would be better to protect his family for a certain future event (everyone dies) than an uncertain future event. I used my whole selling skills to ensure he fully understood that he was going to die at some time in the future, but this was undetermined.

He died of cancer two years later. What price planning.

Widow able to discharge mortgagein full with spare capital for childrens school fees.

Anyone think I should have set up a pension plan ?

All sounds good but I do wish there was a lot less patronising comment about the " poor " who cannot afford advice.or financial planning.

I wonder how many planners have earnings of at least double the national average income and can also demonstrate that they have easily accesible savings equal to their annual income and a pension fund which exceeds the current national average of just £38K.

It would be nice to have some evidence of do as I do rather than do as I say.

Anonymous1, England is a different country to Scotland, having a separate Parliament and a different system of Law.

Sureley a diverse approach to the way we engage with clients can only be good for financial planning as a whole. Well done and good luck.

I can see both sides of the Ned debate. And having sought his help on an Integrity GTEP complaint for a client can stress how helpful he was then.

I feel passionately about giving advice to clients. Ideally I would like to provide advice to all sections of our society - not dependant on their ability to pay. Goodness knows it often those that can least afford to pay that need advice the most!

However, in reality much of what the FSA is doing with RDR if going to leave a majority of the UK population without advice. The reality for a business like mine that has just started is that it's a commercial enterprise. The bills must be paid.

If that means that we have to exclude some people from what we offer then that is how it must be. That saddens me greatly but its a harsh reality.

I am very interested in finding out more about how life planning can help me and the clients I advise. Whether its for me I don't know but I will look at it with an open mind.

If it is for me then I'll try, like everything else I do, to use it in my business in a processed way that measn I can deliver it cost effectively to as many people as I can.

I very much believe life planning is the future for IFAs as sadly the banks, life companies, the internet and Hargreaves will control most of the product distribution.

As a consequence I applaud this venture and wish it well in changing clients minds,

Firstly this is not a moan directed at this initiative, I think that it is a great idea, I do not know any, but am aware of some of the names involved. What frustrates me slightly is that we have the IFP who could be championing this element for us as a whole, it's just that the IFP members, a diverse bunch of independently minded individuals cannot seemingly agree what the institute really stands for.

OK, I am curious, if Life Planning is so good, why is it only now that we are looking at it as a realistic proposition for our mid range clients.

I remember from my Allied Dunbar days, we had a sophisticated planning software system in the early 80's in order to demonstrate the value of Life Assurance planning, Pension planning and other elements of Investment planning. But without a product purchase all that planning work was wasted for both client and adviser.

It produced voluminous reports and graphs etc, but lacked one element.

Personal touch. An adviser sitting down, face to face going through the report and helping the client understand the implications of doing or not doing something. (ie - Selling the planning service and the need to purchase products suitable to satisfying those needs)

I could sit down with any client and still do that with a pen and paper and my existing software package but how does it help us get paid, sufficient to ensure we can maintain our business profitability.

I estimate that at our Tof B standard charge out rate of £125 per hour, that to perform such an exercise with a middle income client, which would initially involve at least 2hrs face to face fact find, another 2-3 hrs analyzing the data and poducing a report which could be understood by the client as well as precis'ing the report into bullet points on seperate sheet for discussion and then presenting the report and its conclusions to the client (another 2 hrs minimum) all this without including travel costs etc.

Now that has been done the basic charge for a middle income client would be circa £875 to outline how much Life Assurance they need and / or Critical illness insurance, how much they need to pay into a pension plan to gain a decent income in retirement, how much to invest for say events like school or university fees etc.

Then we get to the nub of the issues we wil face after RDR inception date, what products are going to be suitable in this new age of enlightenment, or do we no longer get involved in the organisation of product purchase and stand on our pedestal and say, that's what you need, go forth and buy it yourself.

IF and it is a big IF, we are requested by the client to arrange all these plans, how do we load our further time charges on to them. My current records show that even for a simple life assurance plan, I as the adviser, not including admin time, would have to spend at least another 2 hrs sorting out the paperwork at a direct cost to the client of another £250, if he also took out a pension plan (another 2hrs at a cost of £250) and then if he wanted me to arrange an investment plan (say £50K from an inheritance to invest) - anther 5 hrs, which would include product resarch etc and suitability reports (another £625) we are looking at direct costs without commission offsets of around £2000 out of their own pocket.

Why should clients buy anything from us, including advice, if there is no sensible method of paying us over say 5yrs, by using the commission available from product providers, after all, we would only recommend the most suitable plan regardless of levels of commission wouldn't we?

On the assumption that the Internet will see exponential growth in direct product provision, it seems we are heading for a fall. Clients will not pay for advice in the main as they would have to with a solicitor as they view the advice would inevitably lead to the purchase of a product, so why should they pay us to arrange somethng when they can do this perfectly well on the internet direct with whateve company the report recommends.

The doomsayers may be right, the IFA sector will reduce in size, older more experienced advisers will want to get out as soon as practicable, but their businesses would not be a viable sales proposition any longer due to reduction in future renewal / trail commissions and fee income is not something you can rely.

Why do you think firms like Towry Law are buying up practices with large renewal and trail commission client banks and keeping them going?

Do they know something we don't?

Fascinating comments and great to see such support for the Project Eve initiative. At IFA Life we have been championing Life Planning for some time, believing that by including it as part of a service proposition can make many good IFA firms even better/more profitable - and could also be a methodology that will save many firms that are losing their way.

The whole concept of how to deliver an advice proposition to the mass market is very exciting, and there is a lot of discussion on it here

http://www.ifalife.com/forum/replies.asp?ForumID=3&TopicID=3757

Philip Calvert

IFA Life

@Ned,

If you were with Allied Dunbar you will be familiar with accruals and with the pre funding arrangements made by branch managers to get new people into the system.

You only need to replicate this process today to produce a very viable way of making a good living in this industry.

You will have to organise your own funding through a bank loan etc.to finance yourself whilst the accruals build up but you will know that providing you look after your clients you will have a trouble free income.

I dont see why this is not being promoted as the way forward for all advisers rather than these airy fairy schemes.

I have worked increasingly on a fee based approach since 1999, using clashflow planning since 2004 and guess what I have offered the service to those that can afford, are willing and see the point in a high touch fee based service. There does not have to be an alignment with how much money they have to start with, it's how we help them on the journey that counts!

@Ned also and others....

Using a simple accrual approach will allow you to work with clients from all socio economic groups as you probably did with AD. Look after the pennies and the pounds look after themselves.

I have to say that I am truly in awe of George Kinder,s sales skills. Not heard stuff like his since the days of Levitt & Co. in the old days.

Well done guys. Really fantastic work. It's great to hear that you're spreading the word to the mass market and not only the tiny minority of people who have a high net worth. My mission too! Very inspiring... Simonne

What did Victor Hugo say?

"Nothing Is More Powerful Than An Idea Whose Time Has Come!"

Having just conducted 2 Life Planning Workshops for our clients - and seen the change in them - I'm fully behind this initiative!

This is an excellent, knowledgable, passionate team

And they've empirical evidence to support their strategy

What they're articulating has been tested in the crucible of business for many years now. Both within and without Financial Services.

The only problem seems to have been our reticence in the UK to digest ideas that 'weren't invented here'!

I started providing a fee-based service in 1989

And started using Prestwood's cashflow modelling software in 1991

When I eventually added to this the coaching and counselling techniques I learned outside of business... the impact on client relationships was breathtaking.

I aim to do all I can to support Project Eve!

DaveS

@Dave S.

Does beg the question why you are not fully occupied as a succesful adviser ?

Hi Phil

Great Question!

Deserves an answer...

Some years ago I realised that using financial processes to help change clients' lives was just one element of my passion in business.

What I'm doing now... coaching, mentoring, educating, authoring, public speaking, creating group online and offline multi-media programmes to help change businesses and lives...

With the objective (starting with my first 2 books) of eventually touching 1 million professional lives through my team and organisation...

These are my passions

And I believe we perform best when we develop skills around our passions

DaveS

Sorry all - my screen must have been playing up (or my eyes) as I am sure there were only the pictures of the two guys there first time round!

I have just become a Registered Life planner as I invested in doing it with Kinder..

The fact that George Kinder has taken up residence in London shows that he can see the interest that has started to heat up in the UK.

"Project Eve will become a great force for the new way to do yer finances"

And if the success in Holland is anything to go by - this will become a completely new sector in the advice (or more correctly NON-ADVICE) sector of professional services. It's quite amazing that by carefully following the Kinder EVOKE method - I've discovered that I have a much deeper relationship with several of my clients than I could have ever imagined.

And in case you feel doubtful - this isn't a touchy-feely way of getting to work with clients! It's an honest and open way to help them At last, clients will see you in a completely different light and I believe that it's one way that I'll t.

I bought into the Life Planning idea as it's a much more enjoyable way to get people happily involved with Financial Planning. And it's completely compliance free!

May I suggest that "Half measures avail you nothing" . If you want to get into this new Industry - then look at doing it through the Kinder Method. This is a tried and trusted way and it's only by seeing how George Kinder and his experienced team demonstrate what needs to happen that you'll get a Flying Start when you start using it.

I can be very sceptical about new ideas but have discovered something which I believe could see me life planning clients for many years to come.

Maybe I'll offer to lifeplan Hector? He needs it.

@D.S. One thing done well can be very rewarding in both emotional and financial terms !

Cheers and best wishes.

My clients love life time planning who pay and come from all walks of life.

There is talk of 'registered' planners in the comments. What is that all about.? Most Advisers can do this, why the need to register? I have been doing since this type of wok with the software was first launched. There also seems to be or 3 factions trying to put forward the same message. What is that all about? Competition to be first?

I agree, the louder the message gets across the better.

May I recommend you to look up www.kinderinstitute.com where you will learn all about the 5 Day EVOKE process and the 6 month Mentorship programme which once completed offers the Kinder registered designation - Registered Life Planner.

If you are a serious Life Planner I venture to suggest that you have heard of George Kinder as he is known universally as "The Father of Life Planning".

I am so pleased I've had the opportunity to plug the EVOKE process - it's so inspired.

In response to Mr Maxwell-Lyte

I am glad you are inspired

I still don't get the need to be registered, the need to be a member of a'club' or mentoring. All the mentoring in the world does ont (9 times out of 10) result in invoking the inspiration, passion and belief this needs. The training from the founders provokes all the inspiration, passion and belief , process and show how the get the best results virtually for free as they make their money form the software sales. Lots of reading helps to obtain different views and ideas at a cost of £3.99 from Amazon. £2 if you're lucky, How much does it cost for registration through your route? To do something we should have been doing for years.

What took so long?

Add to all of this, David Scarlett's take on marketing adapted to suit and the whole package fits together.

I will learn to type one day!!

I would echo Peter M-L's suggestions and views having attended the same 5 day course as him (and Alan Moran who left an earlier post.) We're all different and Mrs Anonymous might get all she needs from books but I have found that workshops/seminars offer me a greater learning experience, particularly when active involvement through role-plays are included. It takes learning to a different level and offered greater understanding than simply reading the books. Learning typing through attending a course rather than through books may also prove beneficial ;-)

In response to Phillip Melville - re Accruals.

In case you didn't realise the impact of the RDRs ban on commission, in future, the sale of most financial investments will not acquire any "accrual" or trail aned renewal commission, you will be forced to charge an annual / monthly fee, to be agreed by the client which then forms part of the overall charges on their investment if they are unwilling to pay direct. Making the case for that annual/monthly fee retainer will have to be based on some form of action and we all know in our hearts that sometimes we do not review every clients file annually as it is uneconomic to do so/

The generation of so called "passive" income into a financial planning practice will gradually be whittled down to zero within the next 5-10 yrs for most adviser practices as plans drop off, mature or are cancelled, there will be little chance to replace that renewal/trail (accrual) income.

Has no one sussed this out yet?

The RDR ban on commission will devastate most practices over a very short period of time and make them unprofitable so that they have to fold up or sell up, but what, in effect are they going to sell.

The IFA sector will decline until it is probably the smallest contributor to the industry, not the largest as it is now, simply because the major portion of our mid income clients will be unable to afford to pay sufficient money for their Life Planning needs.

This is not a doom merchants scenario, I have come to this conclusion by the application of simple mathematics, (A pocket calculator is a wonderful device and much under used) if applied to current practices methods of remuneration and whether the FEE based option, for the major portion of the consuming public is a realistic proposal. I am pushing the envelope for retirement age (62 next march) and will probably achieve the requisite additional qualifications to continue as an IFA, but in 3+ years time, I may just think - Stuff it!

Do this for yourselves now before it is too late, look at your sales figures, number of clients you actually engage with to generate that volume, cost out your expenses and work out the net profit, then apply those figures to the number of clients you engaged with who bought product and generated commission and you will probably find that to generate just your current income and stand still, you may have to charge fees akin to the level a barrister would charge for his services £250 per hour upwards)

Why do you think the instances of Legal and Accountancy firms going under in recent years has increased, BECAUSE MOST PEOPLE CANNOT AFFORD THEIR FEES, resulting in less income to their practices, thus less profit.

The banks and building societies must be absolutely full of glee, at what the FSA is doing to the iFA sector, in the guise of consumer interests and to "save face"

Wake up guys and gals, our industry position is being downgraded to deliberately steer consumers into either buying direct without advice and thus without protection, or by going to a bank or building society sales person for inferior products. (Complaint generation in the making to be paid by us via the FSCS levy)

I don't know what the estimate is of Providers coming out of the market place, but I am sure that there will be some furious consolidation and acquisition activity in the next two years, once again restricting adviser and consumer choice.

The sheer lack of political and industry representation we as IFAs have is down to us, we do not look after each others interests and we do not band together for the common good, we all run our own little lives, bury our heads in the sand and ignore what is being done to us. If you tried to do this to the Railway Workers or any other major unionised industry, the country would be brought to a halt.

The biggest contributor to our own downfall will be all those product providers who have embraced this ban on commission instead of standing up to the FSA and saying NO, thinking they can provide direct sales to the public and make more money. There will in the near future be a surplus of managing directors without employment if that occurs and we will lose that experience.

Financial plans and Financial Planning need to be sold, they are very rarely bought. Selling that post RDR is going to be difficult and not very profitable.

Having spent many years building up a client bank for my firm, with "accruals" through renewal and trail commission, I can see that within 3-5 yrs that will disappear into the ether.

Selling is a profession, it is about time we all grasped the nettle and put the FSA in their place, write to your MP, the chancellor, Vince Cable and anyone else who has some influence to get this beast tamed.

The demise of the traditional Insurance Broker and the rise of Internet based comparison sites should demonstrate what is going to happen to IFA practices.

I know this diatribe sounds like a prophecy of doom and gloom, as an individual I am normally upbeat, but this imposition on our ability to engage with the public at large and restrict us to dealing only with those persons who are willing to and can afford to pay fees directly is in my opinion a direct betrayal of one of the FSAs basic principles, to protect consumer confidence.

It's daft, it's wrong, but it will happen! Be prepared to lose money and your livelihoods.

Oh and one other thing

Why should we have to borrow money from our competitors (banks etc) to fund ourselves in order to stay in business.

The system was not broke, it did not need fixing, it just needed some refinement, instead the FSA has built a newl, untested leviathon to put us out of the industry, just because you are feeling paranoid, it doesn't mean they are not out to get you !!!

@ Ned,

Sorry but I seem to have completely misled you.

I was likening accruals to creating a business model where clients pay you regular - monthly - smaller amounts for the work you do for them.

I was not talking about some variation in the way product providers pay you.

There is absolutely no need to be gloomy. This model is easy to create and operate with modern technology and age is irrelevant - I am 66 on Thursday.You just need to work out how to express what you do in a way that clients think is worth paying for. if you can't do this then maybe the job is not what you thought it would be ?

The big hurdle is financing your life whilst you build up this type of recurring payment from clients. All other business people have to finance their operations through bank loans etc so why should we not have to instead of relying on providers funding us through commission.

Clients of all types will happily pay for advice in this way believe me.

If all you want is to keep getting paid by providers for selling their products then perhaps a job as a tied agent would be more suitable ?

To conclude if you were in the industry some years ago with Allied you will know that change in our industry is not a new thing and in the past we just gone on with things - with a variety of regulators - as opposed to the constant whingeing that seems to be the hallmark these days.

@Ned - I find your comments very interesting and well put together. I am new to the industry (5 months in, although joining an established family firm for succession) and therefore also find your outlook extremely concerning.

@Philip - Thank you. I feel slightly less concerned now.

I'm reading this thread with great interest, so thank you everybody for your comments. It is great education for a new entrant.

Josef, Ned and Phil M - It may sound strange, but depending upon how fed up I am with what next insitiative seems to be dreamed up in Canary Towers, I find myself agreeing with BOTH Ned and Phil M's comments. I am concerned that much of what Ned has said, could come true and the FSA seems intent on plowing ahead could result in the cure for a mild cold killing the patient. Yet I do agree with Phil Melville that clients will pay regular retainers from most socio economic groups, provided a clear service is explaiend and discussed with them and then followed through. The amount the are willing to pay my retainer at the moment in itself is not in itself sufficient to run a business as it is the renewals and fund based commission of existing contracts that currently does this along with initial work charegd when taking on new clients, but the lead in time until January 2013 to help clients mentally transition to adviser charging may just about be enough for advisers and clients if someone hasn't started yet, but it will be tight if a firm hasn't.

The bad bits of RDR are and remain the lack of any clear thought on clients in the accumulation stage of life, where some form of factoring/accruals either by the client or the adviser is neccessary for regular premium/savings work, along with the risk that too much regulation plus problems with the FSCS, capital adequacy, FOS structure and increased quals result in an exodus of advisers around 2013, when step changes as opposed to a cliff edge would have been wiser...

Oh Phillip,

We are misunderstanding each other, my beef is not how I get paid, it is about the consumer actually getting a choice between fees for work done or the facility for their investment contracts to be charged and spread the cost over the many years, not front loaded contracts as CAR proposes to do and that choice being seen to be open and transparent as it is now, commission disclosure has been with us for years and has not been detrimental to business.

I take onboard your comments re borrowing to facilitate and fund a business, but borrowing to speculate on the success or otherwise of a future business which may or may not be able to make the transition from product provider initial and trail commissions, to fees and monthly retainers has never been a sensible or viable option and it chauves me to say, but the complacency in the IFA secotr is ludicrous.

I do not disagree with the need for better qualifications that give a reflection of our knowledge base and am steadily progressing towards that.

I will bet that barely 1% of the total iFA sector has taken the trouble to complain to their MP or the Chancellor about such a draconian change in business structures. It's not as if this is a European directive, EU advisers can happily operate in this country with commission options on product purchases.

No one at the FSA has any interest in seeing a viable, prosperous and consumer friendly IFA sector, otherwise what is their thinking, that all consumers of financial products will happily pay a monthly retainer to possibly access the services of their IFA at some indeterminate time in the future ? The majority will not.

For a major portion of UK consumers, if asked, their answer would be NO!

I canvassed my client bank a year ago on this subject and not one thought a monthly retainer was a sensible and affordable option.

My client bank is mid market, mid income, about 10% retired and the rest either looking towards it or planning for it.

The undue haste with which the RDR has been proposed, decided upon and is going to be implemented smacks of the desperate throes of a failed regulator trying to salvage some semblance of authority from their failure to control the banks.

Look at what the Stakeholder pension did for the pensions industry. Nothing. It was not a success because advisers could not generate sufficient income from the product to make it a viable proposition.

Same with all the other Stakeholder products.

The housebuilding industry takes about 18% of any new build sale price as their profit (Commission by any other name is still commission) Is it proposed that housebuyers be charged a fee if they purchase a property now. NO it is definitely not viable, the housing market would just die a death.

I am not normally covered in Pessimism, but I feel very angry and most concerned that the general public who are the majority of our clients, not rich people, will be the losers in this battle of wills between the IFA sector and the FSA, product providers are spending a fortune on preparing for these changes, as are we, who is going to pay for all this, the consumer and what benefit will it be to them, NIL.

The principle belief at the FSA seems to be that commission as payment for services and advice is the reason why bad advice is given and why mis selling complaints have spiralled in number.

Taking away the commission option will not stop cheats, liars, thieves and incompetance, the FSA was supposed to protect the interests of consumers yet where were they when Integrity put out its product to the market, what did they do about it in 2006 when it was designated as "high risk" nothing, the plans continued to be sold as they were previously as low to medium investments until the whole mess collapsed around their ears and then the FSCS has the gall to designate that product provider as part of the Intermediary sub class, for which we have to pay an increase in levies, same with Keydata, the FSA knew about the problems with their literature as far back as 2005, did they do anything, NO.

The RDR will fail, there will be a significant reduction in older more experienced advisers like us leaving the industry and very few coming in, except for people like Mr Nero, but he needs to look at these issues with a more jaundiced eye, or they will trip him up.

I do not believe that forcing these changes in such a short space of time is going to help regenerate the economy, our industry or create jobs.

So why do it ?

It's ironic Ned, I actually think the ideas in RDR are good ideas, but I could not agree more with your last para i.e.

"I do not believe that forcing these changes in such a short space of time is going to help regenerate the economy, our industry or create jobs. So why do it ?"

Add to that, I do not think it is going to benefit the consumer in the short term and even the FSA in the RDR discussion papers (or was it one of the reports they commissioned) agreed in the short term it would be detrimental to consumers due to lack of available Independant advice to mid earners etc. My concern is that it could result in collapse of the Independant sector in the UK with the banks picking up all the slack with UNADVISED sales as they have already done with direct only mortgage offerrings, most of which ARE not advised which the FSA appear to be allowing lenders to treat effectively as execution only!

I may have missed something, but I don't seem to see any details for these courses.

I would also like to know how you charge for this service. Having looked at everybodies website that offer "Life Planning" fees are never mentioned.

I would imagine they are in line what life coaches charge.

The Kinder Institute Life Planning training schedule and prices is available at:

https://www.kinderinstitute.com/events/index.htm