Smaller Pond

1991: Favour, the Watch and Fish

Financial planning is changing quite a lot at present. This is due to something that as an industry all financial firms are undergoing. The regulator is in the final stages of implementing its Retail Distribution Review (RDR) which comes into effect on 1st January 2013. As stated before this has little impact on our firm or the advice we provide, however for many it is a radical overhaul. The most salient point is that financial advice needs to be properly paid for and the price of the advice agreed between client and adviser. It must not be determined by a product or product provider.

There is no getting away from the fact that financial planning is not cheap. It involves time, time to get a full picture of a clients assets, liabilities, existing arrangements, plans and hopes for the future, attitude towards risk, capacity for loss and so on... as a result most of us expect Banks to cease providing advice, except to their high net worth clients (which is a service that financial planners like me can easily exceed). The rest, are sadly left to "do it themselves" by making a "direct" purchase of a financial product without advice, just information. For many this will be fine, as their savings are probably small and the complexities therefore limited. However this won't be true for all.

Today HSBC have announced that they are ceasing their "Tied Advice" and will offer a whole of market advisory service, which I suspect will actually be "restricted advice" when it is finalised. This means 650 advisers from HSBC will be losing their jobs. It hasn't been said that this is because of RDR, but it almost certainly is. This is on the back of Barclays decision some months ago to cease providing advice to all but their high net worth customers. I expect further Banks to follow suit, but they tend to have a way of finding a solution.... but the pond is certainly getting smaller.