What will the future hold for the advice sector in 2020?
By Robbie Lawther, 8 Jan 20
Dynamic Planner CEO shares what he believes will be the most transformative issues facing the industry
To read more click on the slides below
More clients see real value from their annual review
Regulation has become a burden for financial advisers, as compliance for IFAs increases yearly.
But, on the other hand, clients have been able to benefit as regulators enforce changes to improve best practice and outcomes for investors.
“Two years in from the introduction of Mifid [Markets in Financial Instruments Directive] II and with many advice firms now having upgraded or planning to upgrade their review process in 2020, clients will begin to really see the benefit of an ongoing advised relationship,” said Goss.
“Done well, firms are able to demonstrate the value they are providing through assessing the ongoing suitability of the portfolio including its risk, performance against risk-based benchmarks, product, cost and as above, sustainability suitability.
“Helping clients feel they are on track should avoid switching due to short-term performance chasing; which is good for the client, the firm and the asset manager.”
Assessing suitability second review is published
The Dynamic Planner chief was also keen to discuss the Financial Conduct Authority’s findings for its assessing suitability review, which will be published later this year.
Goss added: “Its last study in 2017 found that advice in investments, pension accumulation and retirement income was suitable in 93% of cases.
“There were two areas of concern however: defined benefit transfers and high-risk investments.
“This second review is expected to assess how well firms have implemented Mifid II, Priips [Packaged retail investment and insurance-based products] and Product Governance [Prod] requirements.
“The timetable is expected in the spring. It would not be a surprise, perhaps, if some focus was given to the risks of illiquid investments given the issues [that have] surfaced in 2019.
“It will be interesting to see the FCA reflects Esma’s work on sustainability.”
Tags: Dynamic Planner
