We are committed to helping our business partners flourish and adapt to the regulatory conditions.
As a global player in the offshore market, many IFAs have asked us to share our experiences in markets where greater product transparency already exists.
Looking at Australia, the UK and Singapore, there were initial concerns as to the impact commission disclosure might have, but these have long since evaporated as IFAs began to gain market share in the new working environment.
Although territories around the world have their differences, we would suggest that if you want to know what the road ahead will bring, ask those coming back! There are valuable insights we can learn from these post-disclosure markets:
– Business volumes increased
– The IFA market grew
– Standards of professionalism are higher than before
– Financial Advisers are now more likely to be seen as trusted advisers, not product pushers
– Uncommitted advisers left the industry
– Policies now offer greater value, choice and flexibility than before
– IFAs are less reliant on up-front earnings
– The cost of ongoing advice is typically covered by charging a percentage of funds under management
– Business persistency and client retention rates improved
Greater transparency is on the horizon, it’s just a question of when and in what format. Accepting that this will occur, what can we do about it? We can either close our eyes and sleepwalk into the future or start laying the foundations for tomorrow’s business, today.
In our view the winners in a post-disclosure market will be those who:
– Build a value proposition that clients both need, want and are willing to pay for
– Develop a long term mind set and obtain qualifications to the highest level
– Separate ‘advice’ from the product sale, creating a clear distinction between the two
– Move towards ongoing fees to reduce dependency on up-front commission
– Go back to basics, offering the full range of financial services in a holistic way
Greater transparency is a golden opportunity for independent advisers to triumph over alternative forms of advice. Friends Provident International wants to help IFAs transition by continuing to offer products and support services suitable for the post-disclosure world.
The best time for IFAs to start preparing was yesterday, the second best time is the moment you finish reading this article!
