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Wealth Adviser: Austyn James on how to fill a post RDR advice vacuum
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by David Campbell on Jul 05, 2010 at 08:30
Austyn James has a message for the advisory industry: reform or die. The founder and director of Austyn James Consulting puts it slightly more delicately of course, and is keen to emphasise positives, but fears too many are sleepwalking towards the latter choice.
He poses a simple question for businesses which still use commission as a revenue crutch: ‘How are you going to replace income streams? It is nothing to do with ethics. It is simply recognising the changes that are coming over the next five years.’
‘At the moment, all the elements of advice are bundled together. Within five years they will all be segregated and the process of giving a lot of advice will be purely commodified: when you take the value out of any proposition it becomes a commodity.
Born in 1967 in Watford, financial services have always been a large part of James’s life: his father was a regional director for a life company and following his parents divorce his mother remarried, to an old-school local private client broker.
From the age of 11 James earned additional pocket money during the school holidays helping with the administration of client portfolios, updating valuations. He put the money to work, with at best mixed success, playing the oil sector. ‘With minimal input from my stepfather – he correctly thought that the best way to learn was to lose money.’
He did well at school, but knowing that he wanted to work in investment and finance and support himself, decided to find work after completing his A levels, initially at a local bank branch, before moving on to work for SG Warburg on the eurobond desk.
He says that he wasn’t particularly well suited to the power-dressing, yuppie ethos of the late 1980s, however. ‘I came to the view that if that was what the City was I didn’t want to be part of it – too aggressive and grabbing.’
After taking time out he worked through the industry as both broker consultant and high net worth adviser before getting his break in 1995 when an accountancy referral partner in Harrow invited him to establish a financial service division, with James taking 70% of the equity.
The business developed well over the course of the next six years, but having built a successful transactional advisory, he found that he was no longer enjoying the work. ‘I was running myself ragged for clients who didn’t really appreciate it. And when you are looking for something you find it.’