….will impact into the IFA Sector, IFA Jobs & AFPC Qualifications, it’s predicted by many Financial Services gurus. The consequences for IFAs has really been felt recently, as November turns to December, and 2009 rolls in. Gillian Cardy, from Professional Partnerships Ltd, has predicted that many IFAs may leave F/S altogether because of the minimum qualification requirements brought in by RDR, & only 5,000 of a believed 27,000 IFAs have AFPC Qualifications, and there is a big gap to bridge for many IFAs to get unto speed in 2009. A further prediction by Gillian Hardy suggests that in 10 yrs time, minimum standards for IFAs may rise further to Degree Standard. I think there’s a real “sea change” within the IFA Market affecting IFA Jobs and Financial Planning roles moving forward. Perhaps by 2020, they’ll be a small number of pseudo-intellectual fee-based IFAs left, in a very streamlined, almost Solicitor type Industry, where Advisers charge for their time not the products they sell.
Personal Touch has launched, according to the Financial Adviser, a full Paraplanning Service for its members, (which I think is a fantastic idea), as it will free up their members to concentrate on Business Development etc, free in the knowledge, that their back office is covered through well-qualified, compliant Paraplanners. My view is there’s less business out there, so lets make the business that does go through, as “squeaky clean” as possible. I don’t think enough IFAs see the relevance and benefits of sound Paraplanning support, good on Personal Touch and other IFAs that notice the impact of this, especially in these times! In short, Paraplanning Jobs should precede IFA expansion, not the other way round.
In the Banking Sector, despite a little bit of “argy-bargy”, the shareholders of Lloyds (well 95.98% of them) voted in favour of Lloyds TSB taking over HBOS. I don’t think the mergers and acquisitions in the Banking Sector will detract too much from IFA jobs and careers. I think that in the future, there will be a lot of through traffic of clients and their financial planning through these giant Bancassurers, but as people become ever more sophisticated in terms of advice, fee-based IFA Practices will be well placed to add to their retained income.
Maybe on a smaller scale, lets not forget, there have been many mergers and acquisitions in the IFA market as well. Buckles, in North Wales, according to Money Marketing, have acquired Highgrove Investments, bringing their clients in the North Wales/Cheshire area to 25,000, and this adds to their strategy of acquiring client bases of retiring IFAs, and also a Graduate Scheme for their IFAs who are trained up and can ease into a full client base from day 1. Nigel Speirs, the Chief Exec, of Buckles says that these graduate IFAs will inherit a client base of around 400 private individuals. More and more regional IFA firms are growing by acquisition in this way.
So what effects has the pre-budget report of Mr Darling had this week? Well the VAT reduction, may, its been suggested, lead to charges for fee-based advisers, tax planners and private-client brokers being reduced on a temporary basis, according to the Financial Adviser. Furthermore, the Investment Management Association, said that the Pre-Budget, could make the UK in general, more competitive as a home for certain Investment Funds (Authorised ones of course!). Surely not, some good news for IFAs, and also lets not forget, the VAT drop will reduce payments to Recruiters for placements. More good news!
Finally, could lenders be given the “green light” to further pass on the Base Rate cut to consumers, as three month LIBOR rate (very important for the Mortgage Market) fell to 3.91%. Who knows, could we have turned the corner? I think by 1st/2nd quarters of 2009, we’ll see a recovery in the volumes of activity in the Mortgage Market.
In summary then, there are rays of sunshine out there, if IFAs push on, keep on improving themselves, get those vital qualifications out of the way, always keep their eyes peeled for acquisitions of decent client bases from retiring IFAs, boost their Paraplanning support, they’ll inherit the earth when the good times come back! Good news for IFA jobs in the future, in practices that can meet the challenges of RDR, & TCF, bring on December……….