Molly Burchell shares key takeaways from the hugely successful PFS Festival of Financial Planning
The PFS Festival of Financial Planning returned for the first time in five years to the National Exhibition Centre in Birmingham – and it was well worth the wait.
Fully embracing the festival vibe, the venue showcased a spectacular ribboned tent, elevated over a communal space of artificial grass, occupied by deck chairs and picnic benches, as well as welcoming our very own PFS band, Consumer Duty, headlining the centre stage. Thankfully no wellie boots were needed (although the rain did make its presence felt across both days).
The festival was a huge success, attracting nearly 2,400 financial professionals across the two days and featuring nearly 80 exhibitors.
Day one of the festival was opened by Don Macintyre, PFS interim CEO, and PFS president Caroline Stuart, who shared their passion, vision and priorities for the financial planning profession.
“Throw yourself in, learn loads and share your ideas,” Stuart told delegates.
Macintyre said a key priority must be to focus on creating a more diverse profession and showcasing how a career in financial planning can be both rewarding and progressive.
Day one was drawn to a close by celebrating the extraordinary work of financial planners and journalists at the PFS Awards 2022. The awards were presented and announced by actress, television presenter and comedian, Sally Phillips. Huge congratulations go to all nominees and winners.
The festival’s keynote speaker, paralympic athlete Dame Tanni Grey-Thompson, inspired the audience by sharing her life achievements, overcoming challenges and lessons that helped shape her career.
Key themes discussed during the event included the Consumer Duty, leadership, the culture of a business and financial advice technology. Below are a few key takeaways from the event.
Duty bound
The new Consumer Duty requirements were a common talking point throughout the event, with finance professionals focusing on how best to employ the policy within their business or organisation, successfully.
Therese Chambers, director of consumer investments at the Financial Conduct Authority (FCA), opened the discussion by laying out the FCA’s priorities for the consumer investment sector and financial advice market, focusing on how the Consumer Duty affects financial advisers.
The FCA wants to see more consumers investing their money safely and in a better consumer investment market. However, this can only be achieved if financial advisers improve the delivery of financial advice with the help of the Consumer Investment Strategy and Consumer Duty.
Due to certain factors such as longer life expectancy, consumers are having to make more complex financial decisions, while issues such as the increased number of products in the market are contributing to a sense that these decisions can seem intimidating. It is, therefore, the financial adviser’s obligation to help consumers navigate the complexity of the financial markets and to enable a financially secure future.
There is more to do in the financial advice space, hence the introduction of the Consumer Duty, which should be seen as “providing a higher standard of protection for consumers”, said Chambers. This will offer the ability to act sufficiently in cases where poor outcomes for consumers are identified, putting consumer outcomes at the heart of financial planning.
Evidence must be sufficiently provided to demonstrate that financial advice given was not the cause of poor consumer outcomes. Chambers emphasised that we should “expect to see the FCA acting much more assertively”, when referring to firms not adhering to the Consumer Duty.
Firms putting consumer outcomes at the heart of their business should encourage positive cultural change and lead to strengthening the bond between good consumer outcomes and successful firms.
Power Planning
Big news dropped on the second day of the festival, when Duncan Parkes, compliance director at Old Mill, and Alasdair Walker, managing director at HA&W, announced the launch of the POWER Planning approach.
The PFS and financial planning practitioner panel has been working on what is known as the POWER Planning scheme, which follows a complementary approach, whereby clients’ outcomes and feelings are the pivotal element for achieving better financial planning outcomes, rather than focusing solely on the financial results.
They opened the session by identifying how the POWER panel members faced their first hurdle when establishing that ‘financial planning’ means different things to different people.
Which prompted the question: how will the profession ever progress, if not everyone is on the same journey?
Parkes explained that to establish what is meant by financial planning, the solution should avoid focusing on processes and procedures, but instead should focus on what financial planners are trying to achieve for their clients – and, to attain this, would mean working towards a certain number of outcomes.
Thus, the POWER Planning approach aims to help financial planners to focus on five key consumer outcomes, coined the Five Cs:
- Clarity – The need to plan for something based on clients’ personal outcomes.
- Comprehension – The need to understand what resources are available to help clients achieve their plan.
- Choice – Generate evidence to help financial planners make informed decisions on the next steps of the plan.
- Control – Providing the client with regulated financial advice that improves their chances of success.
- Confidence – The need to implement regular reviews to ensure it is clear to clients that they are on the trajectory to achieving their goals.
“These outcomes need to be personal to the client and cannot be generic,” said Parkes.
Walker added: “By focusing on these human outcomes of financial planning, widely recognised by consumers, it is possible to have a unified approach.”
He also underlined that adopting the POWER Planning initiative will ultimately benefit outcomes for financial businesses, financial planning professionals and most importantly the consumer.
Registrations to become a POWER Planner are now open before the scheme officially launches in the new year
It’s all in the communication
Many sessions sought to highlight the importance of delivering consumers relevant and comprehendible communication to aid better financial decisions, as without consumer understanding, better financial decisions cannot be made.
Mark Polson, from financial services consultancy The Lang Cat, discussed how communications with clients, in reference to the Consumer Duty, need to be carefully considered by firms. He explained: “It is not enough for clients to have an adviser – they have to understand the financial decisions themselves.”
However, the situation seems to be that when it comes to delivering communications to clients, there tends to be simply a widespread distribution of terms and conditions. The question then is: can clients make an informed decision based on a confusing multi-page document?
Polson added: “A lot of what the Duty is about is ensuring that clients are empowered to make better financial decisions.” A significant part of that empowerment stems from the quality and quantity of communication.
It is down to firms to deliver appropriate and comprehensible communication to clients, as well as ensuring everyone involved understands what is going on throughout the client’s financial journey.
Polson concluded: “Price is a fundamental component of value and we need to get both parts right in order to deliver that.”
The ‘great wealth transfer’
Keynote speaker Dr Eliza Filby closed the festival with an eye-opening perspective on the future of families and the so-called ‘great wealth transfer’. Filby is an intergenerational expert, historian, writer and speaker, helping organisations understand the generational shifts in society and preparing them for the future.
Within the current economic climate, the next decade will see “unprecedented sums transfer across the generations”, Filby said. She underlined the fact that it is now important to address the situation and asked: “How can advisers engage with the whole family beyond the Baby Boomers (1942-1965) and ensure all generations are served?”
Although there is no simple answer to the question, Filby proposed three starting points: communication, education and agility.
Back in the room
Looking back at the Festival of Financial Planning overall, the PFS is thrilled to be hosting and attending in-person events again and is delighted the event was such a success.
The event certainly proved that financial planning conferences can be fun as well as educational, and engendered renewed excitement around the evolving profession of financial planning.
Molly Burchell is communications executive at the CII
