Advisers have made strong progress improving their professionalism since the retail distribution review (RDR) was first proposed but still have work to do implementing adviser charging and understanding VAT, according to outgoing Personal Finance Society (PFS) chief executive Fay Goddard.
Goddard, who will retire from her position at the head of the PFS in 2013, has led the organisation since 2008, a five-year period she described as ‘challenging’ for advisers.
She said she could not overemphasise the difficulties advisers faced with the RDR, the financial crisis, low interest rates and constant political reforms converging to put immense pressure on their businesses over the past few years.
Under Goddard’s stewardship, the PFS has played a significant role in helping advisers to become qualified for the RDR and in boosting professionalism with its chartered financial planning initiative, but she is aware that qualifications are only one part of the challenge.
She said she was still concerned about whether IFAs understood and were able to cope with adviser charging, legacy issues, VAT and the inconsistency of providers’ offerings. ‘The biggest challenge for advisory firms is wading through all of this,’ she said.
‘[Advisers are] getting a complete patchwork [of information] from providers, platforms and fund managers, and it’s going to be the [toughest] challenge for the first few months,’ said Goddard.
The PFS’s annual survey of members conducted in September showed that 90% of IFAs felt personally prepared for the challenges the RDR would bring but only 80% thought their firm was ready to implement the changes.
‘That’s one in five firms that has not implemented adviser charging,’ she said. ‘They’re leaving it very, very late.’
Awaiting a successor
However, Goddard said she would not leave advisers high and dry at the start of a new challenge. She has promised to stay with the PFS until her successor is found, and will officially step down in March.
‘It is demanding and I think [around] five years is the right amount of time for this position,’ she said.
‘It’s ready and ripe for a fresh approach, and someone who can take the helm full of energy. For me, five years has been good.’
Goddard said advisers’ attitudes to the RDR had changed from resentment to acceptance during her tenure.
‘When I took the role, there were still people in denial about the RDR happening, adamant that they would not take a level four exam,’ she said.
‘Several of them have [now] come up to me and said not only did they get their level four and statement of professional standing but they’re going on to chartered.’
Chartered success story
The success of the chartered financial planner initiative has characterised Goddard’s time at the helm of the PFS. There are now 3,200 chartered advisers and 6,000 studying to gain chartered status.
‘That’s peer pressure, and it’s coming from these individuals,’ said Goddard. ‘The [thing I’m proudest of] is that people have risen above and beyond [the required qualifications] and we have a chartered profession in its infancy, which has always been my vision, and it has come quicker than I expected. All credit to the members.’
Goddard is officially retiring to spend more time with her grandchildren, although she has not ruled out a return to work in the future, albeit not full-time.
She said she wanted to stay involved in the financial planning profession, perhaps through non-executive roles, and would keep up with policy and regulation.
‘It was always my intention to retire when I was 62. Luckily, I’ve had good financial planning advice’, she said with a chuckle, ‘and I’m in the position to do it.’
Fay Goddard CV
2008-present Personal Finance Society, chief executive
European Financial Planning Board, member
Pensions Policy Institute, governor
Association of Independent Financial Advisers, deputy director general
Association of Independent Financial Advisers, policy director
1997-1999 IFA Association, technical officer