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Retreat 2017: Advisers split on succession plans

Advisers at the New Model Adviser® Retreat had their say on regulation, Brexit, succession planning and technology.

We polled 121 delegates at our annual retreat on four of the most pertinent issues facing advisers, all of which could shape the future of the profession: pension transfers, Brexit, succession and disruption.

Read on to see how they answered questions about pensions, regulation and Brexit.

We polled 121 delegates at our annual retreat on four of the most pertinent issues facing advisers, all of which could shape the future of the profession: pension transfers, Brexit, succession and disruption.

Read on to see how they answered questions about pensions, regulation and Brexit.

DB despair

One of the most challenging issues facing both advisers and the regulator is that of defined benefit (DB) transfers, which have been touted by some commentators as the next big mis-selling scandal.

We asked advisers whether the Financial Conduct Authority (FCA) was doing enough to police this threat. 60% thought the regulator was falling short.

Andrew Reeves, director of Northamptonshire-based The Investment Coach, said things were going in the right direction now the regulator has said it plans to scrap transfer value analysis (TVAS) reports. In June it said it would replace TVAS with a system called appropriate pension transfer analysis.

He said: ‘The FCA has acknowledged that TVAS is a failed system, and there are moves afoot to change that. I think it is going in the right direction. But it should take a lot more feedback from practitioners actually doing transfers.

‘The FCA should also link up more with the Treasury. There was a breakdown in communication and it has taken a while to catch up.’

Brexit bother

We could not host a business event in the UK without mention of Brexit. Prime minister Theresa May famously said no deal would be better than a bad deal. We asked how likely it was that the ongoing negotiations would produce a good deal.

53% said it was either unlikely or highly unlikely. A further 28% said they had no idea how things would pan out.

Darren Lloyd Thomas, managing director of Haverfordwest-based Thomas and Thomas Financial Services, was worried those leading the Brexit negotiations were losing sight of what is important.

He said: ‘Political games appear to be being put before the national interest, and that worries me greatly.’

Succession split

Advisers were evenly split on the issue of exit planning, with 31% planning to sell, 34% planning for succession and 36% not sure.

Derek Smith, managing director at Cavendish Ware, said: ‘I am going for the succession option, because we are developing our own staff and promoting them up through the business. If we can finance them to be successors, that would be our preference.

‘But you have to be realistic. If someone comes along with a big cheque, that’s something you have to look at.’

Robo on the rise

The final question focused on where the next big change in the profession would come from. More than half (54%) of advisers saw technology as the most significant potential disruptor, while 14% thought government policy would be most influential.

Thomas said technology, in the form of robo-advice, would create serious change for the profession.

He said: ‘It’s very tempting if you’re thinking of upscaling your proposition and want to reach a more clients more cost-effectively. The risks, though, are still unresolved.

‘Unless you can deliver expensive solutions with real algorithms and proper robo-advice, it is just based on decision trees. I don’t think it has developed enough yet.’

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