With Brexit and a continuing torrent of new regulation creating challenges, Keith Richards explains how advisers can offer much-needed guidance in the coming year
Overall, 2018 was a hugely busy year, not least because of a whole alphabet soup of new regulation for advisers to contend with that included GDPR, MiFID and IDD.
As we look forward to 2019, we can quickly see that it’s going to be even more intense with debate over the UK’s withdrawal from the European Union becoming more and more impassioned. It seems strange to think that only seven years ago, the word ‘Brexit’ didn’t even exist.
Although we are mostly spectators when it comes to the fireworks that are going on in Westminster, we can still help clients prepare for a difficult period ahead. Whatever outcome finally emerges, we know that there are 1.2 million UK nationals living in the EU, many of whom will have a portfolio of assets that stretches across national borders.
It is clear that we have world-class talent and expertise in the financial planning community. Harnessing its full potential will be critical in meeting the headlong challenges of 2019
For these investors, getting holistic advice across their whole portfolio will be invaluable. That is why in the run-up to Brexit we have negotiated an agreement with the European Financial Planning Association (EFPA). That means Diploma and Advanced Diploma qualifications are now aligned and recognised through the equivalent European financial planning standards, which are fully or part accredited by the main European regulators.
The agreement will help ensure that consumers who wish to access advice from UK advisers, or maintain existing relationships in a post-Brexit environment, will be able to do so as part of an all-embracing quality standard across Europe.
While things change every week in international politics, the fundamentals of good advice stay the same. That’s why in 2019 we are going to step up a gear with continuing professional development and the sharing of good practice from both a technical and soft-skill perspective. This will include new work on due diligence, risk profiling and suitability assessments. It will be further enhanced by a dedicated financial planning programme, with a new series of workshops under the POWER brand.
Pension transfers proved to be a major strength and weakness for the financial advice profession last year. In response to recent criticisms from the Financial Conduct Authority we will use our new Pensions Advice Taskforce to lead a cross-market pensions stakeholder group. This group will develop and implement consumer-facing guidance that is intended to empower and improve consumer engagement and outcomes (see page 10 of
PFP for more details).
Our 2018 annual symposium highlighted the need to tackle the largest intergenerational wealth gap since records began. A 13% fall in home ownership between 2008 and 2017 is just one consequence of stagnant wages since the financial crash, coupled with greater job insecurity. The period 2001 to 2017 saw a 51% increase in the number of people in self-employed and freelance roles – many of them zero-hours workers rather than traditional self-employed entrepreneurs.
However, this picture is not as bleak as it first seems. As the Resolution Foundation has shown, we have not seen the millennial generation become a generation ‘lost’ to unemployment, in the same way that we did in the early 1980s – in fact, millennials have experienced unemployment rates that are 25% lower than baby boomers at the same age. Employment rates among women in particular are higher than ever. This is a generation with a strong experience of work, a higher level of educational attainment and a generation that stands to inherit more than a trillion pounds by 2030.
We need to ensure the profession plays its role in serving the younger generations to secure their financial future. Therefore, we will be building on the support and guidance that is specifically focused on the next generation of financial advice practitioners and aim to engender a culture of financial awareness among the younger end of society.
Beginning this new year, it is clear that we have world-class talent and expertise in the financial planning community. Harnessing its full potential will be critical in meeting the headlong challenges of 2019. This can only be accomplished by improving consumer outcomes, increasing access to financial advice, developing technical skills, improving diversity within the profession and proactively addressing areas of concern, real or perceived.
One thing remains clear: the more chaotic the world becomes, the more people need professional financial advisers to help them navigate through it. In 2019, we will be here to support you in delivering that vital service. ●
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
ScamSmart: thepfs.org/scams Good practice hub: thepfs.org/good-practice
Follow us on Twitter: @pfsconf