Keith Richards reflects on what has been achieved in the first 15 years of the Society and what the future holds
The PFS celebrated its 15-year anniversary this month, giving us a chance to look back at the revolution of our profession that has taken place in that time.
In 2006, a year after the PFS was established, John Tiner, then chief executive of the Financial Services Authority, announced the retail distribution review (RDR), saying: “While there are certainly firms in the market who meet or exceed the Financial Services Authority’s standards… there are still far too many who fall some way short. In many cases, it may be that the enthusiasm and good intent of senior management has failed to translate into real understanding at working level.”
Six years later, the Financial Conduct Authority (FCA) implemented the RDR, which is still one of the biggest reforms of any financial advice market in the world. Many thought it posed a huge threat to the profession. In 2012, as the implementation date drew near, one highly respected commentator said: “Much of the historic financial advice industry in the UK will be destroyed with major job losses.”
In this context, the progress of the PFS is extraordinary. At the end of 2005, membership of the PFS had reached 22,200, with 3,913 members qualified to Level 4 Diploma, today’s post-RDR minimum qualification standard. Fast forward 15 years and the PFS is the sector’s leading professional body with more than 40,000 members, 53% of who are now qualified to at least Level 4. Many have pushed on to higher standards.
In December 2005, Chartered financial planner status was launched to help consumers recognise those advisers achieving high technical competence; by year end 389 early adopters had proudly qualified to use the title. Today, more than 7,000 members are now eligible to use the coveted title.
Perceptions of those using regulated advice are highly positive, with strong levels of satisfaction, for both one-off and ongoing regulated advice
The challenge that Mr Tiner set in 2006 – to turn good intentions into consistently high professional standards – has been met. This was underlined by a recent piece of qualitative research for the FCA, which noted: “Perceptions of those using regulated advice are highly positive, with strong levels of satisfaction, for both one-off and ongoing regulated advice. A key outcome is the emotional benefit of receiving peace of mind that appropriate action is being taken to meet financial objectives. The value of advice is clear to this group.”
However, we are not resting on our laurels. The last five years have seen even bigger challenges for our profession: the introduction of pension freedoms at breakneck speed in 2015, the hardening market in professional indemnity insurance and the opportunities that come with technological advances such as open banking.
Facing up to these challenges will require the kind of energy and creativity that helped our profession turn the RDR into a success. Most importantly, we will have to use the community that we have created to solve problems together.
In that spirit, 2020 will also see the return of the much-lauded Festival of Financial Planning at Birmingham’s NEC in November. The 2016 event proved popular in uniting the sector, with 3,500 delegates enjoying top-quality continuing professional development while networking in a fun environment.
Taking the initiative
During the last decade, the PFS has also increased its engagement and influence with government, regulators and consumer groups. Recent initiatives include the creation of The Pension Advice Taskforce and resulting Pension Transfer Gold Standard, which is gathering momentum with stakeholders across the market. And 2020 will see the return of FCA speakers to our programme, keen to share examples of good and poor practice around pension transfers.
We are expanding our pro bono programmes and increasing the reach of our My Personal Finance Skills initiative in schools nationwide, as a way of both educating students about personal finance and also showcasing the rewarding careers available in the sector. It is exciting for the future of our profession that we are beginning to attract new generations of advice professionals with a clear benchmark and role within a Chartered profession.
During the next 15 years, I am certain that we will see growth in the numbers of advisers and, together with innovative fintech solutions, we will finally start to address the advice gap.
Join the discussion
For more information and to offer your feedback, please visit:
PFS member email: firstname.lastname@example.org
Pension Transfer Gold Standard: thepfs.org/ptgs
PFS financial planning and good practice: pfspower.org
Good practice hub: thepfs.org/good-practice