Opinion - Strength to Strength

After another period of great progress for the Personal Finance Society, CEO Keith Richards reflects on the PFS graduation, the Connect e-mentoring platform and ‘My Personal Finance Skills’ pro bono education programme 

The PFS graduation is always a high point of the year. This September’s event was all the more encouraging because we saw the profession making huge strides towards becoming more diverse. Candidates from 24 to 64 years of age achieved new qualifications and 30% of them were female. We are attracting a better range of new talent all the time, allowing us to serve the public with an even richer and broader range of experience.

Making the best use of this diversity in skills and experience, the Connect e-mentoring initiative was launched in June this year and has had great success. This initiative was built to promote professional development and learning for personal finance professionals at any stage of their careers, while also accruing points towards continuing professional development hours for participation. So far, there are more than 1,000 people taking part in Connect, which is a great indication that we as a profession recognise the merit in sharing long-earned experience and innovative ideas among ourselves, all to the ultimate benefit of our clients and the public at large.

On a related subject, in September we expanded ‘My Personal Finance Skills’, our pro bono programme that facilitates personal finance professionals to deliver financial education and awareness workshops to schools across the UK. The programme now involves more workshops for practical participation from young people aged between 15 and 18. More than 700 members have participated in this programme to date, delivering the curriculum to more than 5,000 young people.

In keeping with this subject of sharing and collaboration, the theme for our 2019 conference is ‘Future Proof’, as the PFS realises that it is during these times of uncertainty that our service is most needed by our clients. The conference is about safeguarding our clients’ interests by building a sustainable future for our profession. Attendance provides a genuine opportunity to discuss the key themes impacting the profession and to share ideas around good practice.

We are attracting a better range of new talent all the time, allowing us to serve the public with an even richer and broader range of experience

In the regulatory space, one issue that has been on everyone’s mind recently has been the UK Financial Conduct Authority’s (FCA) new guidance on defined benefit pension transfers – and more crucially, the reaction of professional indemnity insurers to the FCA’s new stance.

We received a huge amount of helpful input on this from firms that had signed up to the Pensions Advice Taskforce. Many respondents pointed out that contingent fees were not the root cause of any problems the FCA had found in the market, and that the key was to manage inevitable conflicts of interest right across the advice space. Others felt that a ban on contingent fees was inevitable. They felt that the profession should accept the ban and move on.

In our response, we pointed out the clear fact that contingent fees are not the root cause of advice issues in this market and that a ban will still leave clients putting pressure on advisers to access funds in their defined benefit pension scheme. However, we have also acknowledged the pressure the FCA is under to act on contingent charges, given the comments of the Department for Work and Pensions select committee, among others.

Clarity needed

We noted that advisers need clarity in this market, given the pressure they find themselves under from many scheme members to unlock their defined benefit pension find. As a result, we said that if the FCA does go ahead with its plan to impose a ban on contingent fees, it should not allow exceptions based on affordability or ill health. This is because it would then be for an adviser to demonstrate that a client was under sufficient financial pressure, or in sufficiently poor health, to justify a contingent fee. This would leave advisers open to criticism at a future date for making a subjective judgement that the regulator or the ombudsman disagreed with.

We do not believe it is fair for the regulatory system to present a ban on contingent charging as having no impact on hard cases, while leaving it to advisers to manage more ambiguity and take on more regulatory risk in the process.

Whatever the future has in store on pension transfers, we have seen that the advice profession is going from strength to strength. Wherever I look – from our preparations for the Future Proof conference, to the pro bono work being done by advisers, to the new graduates coming into the profession, I see the strongest community in financial services coming together to serve the public more fully than ever before.