Bobbi Sills highlights five key takeaways from the PFS Retirement & Investment Specialist Regional Roadshows
The PFS Retirement & Investment Specialist Regional Roadshows took place in September, marking the long-awaited return to face-to-face events.
Throughout the day, financial advisers heard from a host of leading subject-matter specialists about the current hot topics influencing their investment and retirement advice.
Here are five things we learned about what advisers need to be ready for in the years ahead:
1 Establish a purpose
Firms must ensure their mission statement is crystal clear to create a long-term competitive advantage, said Paul Faragher, sales director at M&G Investments.
In 2019, the US Business Roundtable redefined the purpose of a corporation as “no longer to maximise profits for shareholders, but to benefit other stakeholders as well, including employees, customers and citizens”.
Mr Faragher urged advisers to consider what this really means for their business in terms of creating value for all stakeholders that goes beyond simply boosting short-term company profits.
If your business has not already implemented policies to demonstrate social and environmental responsibility, now is the time to do so, he noted.
Mr Faragher added: “The tenets of conscious capitalism bring together wider stakeholder integration, more conscious leadership, culture and management, as well as a wider and higher purpose that companies now have to demonstrate to meet the approval of the market.
“In the new world that we are in, it is incredibly important that companies engage in positive action aligned with purpose.”
2 Look after your employees
If businesses are to thrive financially, they must first ensure they have a well-balanced strategy that considers the interests and wellbeing of the workforce, according to Mr Faragher.
He noted that a key driver in modern business is an emphasis on employee wellbeing, including ensuring safety in the workplace and paying fair wages.
Mr Faragher pointed to sports giant Adidas as an example of an organisation with a corporate responsibility structure based on three pillars: community involvement, employee engagement and corporate giving.
He said: “It is incredibly important that companies are acutely aware of their wider responsibilities beyond that of just their shareholders.”
He added: “There is strong evidence that when employee needs are met, profitability can soar.”
3 Create a narrative
In another session, Jamie Farquhar, business development director at Square Mile Investment Services, explored the practical implications faced by financial advisers in delivering an environmental, social and governance (ESG) strategy for clients.
Capital flows are likely to drive change in the ESG space faster than governmental or regulatory approaches, therefore advisers have a key role to play, said Mr Farquhar.
He went on to say how it is crucial advisers establish a narrative that clients will understand and identify with. Creating a simple storyline around responsible and sustainable investment will resonate deeply with many clients, he acknowledged.
“While ESG factors are important, we must remember that they are an investment input rather than a product solution,” he said. “The clearer narrative when dealing with clients is around sustainable investing as an output that seeks to do good, avoid harm and lead change.”
4 Embrace ‘ESG’ investing
Mr Farquhar told advisers gathered at the event that there are two ways they can integrate ESG into their centralised investment propositions.
He said they can either offer ESG investment as a ‘choice’ to all clients or offer ESG investment front of house and apply it to all clients directly.
But regardless of which route they opt for, advisers do not need to open Pandora’s Box to embrace sustainability, noted Mr Farquhar.
He said: “Square Mile has identified that what many financial advisers fear is going down the rabbit hole of asking a client an open question at the fact-find stage, to which they then come up with many different angles.”
He added: “You should first establish what your client’s needs are. In terms of keeping things simple, you could ask the initial question, ‘Do you wish to invest responsibly?’, with a definition of what that means.
“It is important to identify preferences among your clients, educate them on what those preferences mean and discuss them.
“You should define and agree the approach they wish to take, evaluate the appropriate investments to meet those requirements and then implement in terms of a portfolio construct,” he concluded.
Following the switch to a fully digital programme throughout the pandemic, the high levels of attendance at the roadshows are a reminder that no matter how good an online offering is, the buzz of a physical event and the networking opportunities it creates are invaluable resources for members.
Yogesh Nakarja, financial adviser at Lighthouse Financial Planning, said: “It feels great to be back in a physical room with peers again. There are many benefits to our live events, not least the valuable doors to networking opportunities they open.
“The luxury of being able to talk to fellow advisers and share ideas in person is something we have all missed out on in the past year.”
To find out more about the PFS events programme for 2021, visit: https://bit.ly/3GvOu8Z
Bobbi Sills is communications executive of the CII