Client-centric advice in
an ever-changing world

How do we make sense of the past to help clients in the future?

This was the overriding question of the day at FTAdviser's flagship Financial Advice Forum, as panellists and delegates alike discussed how the world of financial advice has changed significantly over the past 10 years – and is set for even more changes in the years ahead.

Following the opening remarks, which were accompanied by a spread of baked goods, fresh breakfast rolls and strong coffee, the first panel discussed why 2022 was the ‘Anniversary year’. 

Tish Hanifan, founder of the Society of Later-Life Advisers; Sarah Lord, past president of the Personal Finance Society, Rob Sinclair, chief executive of the Association of Mortgage Intermediaries, and Derek Bradley, founder of Panacea Adviser, took delegates on a whistle-stop tour of regulatory intervention from 2012 to 2022.

They looked at the Retail Distribution Review and the ongoing aftermath of the advice gap; how auto-enrolment in 2012 has helped millions of people get started on their pension journey, but how more needs to be done; discussed the problems caused by pension freedoms in 2015, and a wealth of regulatory reforms and progression that will be needed to help advisers and their clients through the next 10 years.

As Hanifan commented: “Regulation is like a marriage – you are sort of in love with the idea of it, but you spend too much time in the engagement period.”

Following this, Caroline Rainbird, chief executive of the Financial Services Compensation Scheme, spoke with FTAdviser’s multi-media editor Carmen Reichman about the levies, why the FSCS is necessary and where potential problems lie.

Rainbird told delegates: “Sadly, there are a number of bad players – deliberately or misinformed – that come into the industry, cause immense damage and ripples across many areas, and that’s the type of financial advisers that we see unfortunately.”

Alongside highlighting poor financial advice, Rainbird explained that pension advice in particular was a growing area for the FSCS.

“[It’s] extremely complex [and] extremely upsetting for customers who have to come and see us, but a growing area of our work is on those complex mentioned claims,” she said.

Delegates could choose whether to remain in the main area for the next session, which was on the new consumer duty rules, or join a roundtable on how to spot the red flags when making environmental, social or governance investment recommendations to clients. 

During the session on the new consumer duty regulations, Therese Chambers, director of consumer investments for the Financial Conduct Authority, told delegates they should take the rules “seriously”. 

She said: “This is a significant regulatory initiative – we are trying to raise standards in this sector.”

Another panel session followed, this time on how advisers could help clients to inflation-proof their portfolios. 

Fund manager Roger Skeldon, from sponsor Time Investments, said there was “no perfect protection from inflation”, especially in the short to medium term, but focusing on specific funds with a long-term vision is helpful. 

When asked if he was seeing a ‘flight to safety’ towards alternative asset classes, given the challenging environment the UK is in at the moment, Skeldon said he was seeing different behaviour in aspects of real estate and real assets, like renewable energy. 

After a brief break, during which delegates could network and explore the stands from the event’s sponsors – WisdomTree, Morningstar Wealth Platform, Time Investments and Octopus – features editor Melanie Tringham sat down with a panel of guests to discuss the challenges and opportunities presented by next-generation financial planning.

Colin Lawson, founder of Equilibrium, said: "We hold death rehearsals with clients.

"I get them in a room and I say 'Shut up Anthony, you're dead' – and he isn't allowed to speak. This way you get to find out all sorts of things – that wills haven't been signed or his dependents don't know where the wills are or what Anthony's passwords are."

A second panel followed, this time focusing on how retirement income landscapes have become increasingly complex, with self-managed investments, drawdowns and later-life lending emerging as options for over-55s. 

The panel explored how advisers can best navigate this labyrinth of options to produce the best retirement outcomes for clients.

A lunch buffet was served – providing a chance for more networking as well as allowing delegates to get their step count up – before the afternoon sessions began. 

Mega-trends and digital transformations

The first session after lunch was on the mega-trends that sit above a client’s portfolio. Mobeen Tahir, director of research at WisdomTree, spoke of the need for flexible thinking about approaching mega-trend investing as things change.

He said: "We can talk about hydrogen now but maybe five years in the future we will have something else in this space – so you need flexibility."

Also speaking on the panel was Tanya Pein, investment specialist for In2 Planning, who said: "I'm very much in the listening business – what do clients want with their money? Then we can introduce clients to ways they can future-proof their portfolios."

This session was followed by a panel on defined benefit transfers, which continues to be a hot topic for advisers who seek to effectively manage client pensions.

Guests discussed some of the biggest challenges and opportunities facing advisers in the pension transfer space, as well as what the latest guidance says.

Indeed, a poll carried out ahead of the Forum found that more than 51 per cent of advisers were worried future complaints might arise if they carry out DB transfer advice.

Continuing the theme, 'DB is a headache', it certainly can be a problem when it comes to attempting to sell your firm, according to Brian Hill, head of strategic exits at The Exit Partnership, who was speaking on the next panel session. This explored exit strategies and how to succession-proof an advice business, as well as what to watch out for when making an exit plan.

This was held at the same time as a roundtable on the future of buy-to-let. The consensus from advisers at the break-out discussion was that the government really needs to prioritise first-time buyers rather than offering support or tax breaks to buy-to-let investors.

After another coffee break, delegates could once again choose which session to attend: a discussion on the pensions dashboard, led by sister title Pension Expert's deputy editor Alex Janiaud, or a practical session on how to have the professional indemnity conversation with your insurer, chaired by deputy features editor Ima Jackson-Obot.

During this session, Melony Holman, compliance consultant for Compliance & Training Solutions, and Toni Sheen, director of PI Financial, fielded dozens of questions about what advisers need to do to get the right level of PI cover.

Some top tips included:

• Making sure all your percentage splits of business revenue add up to 100 per cent.
• Send typed, rather than handwritten forms.
• Check you have the correct dates.
• Make sure you do a thorough check if there are any potential complaints.

Sheen said: "Do not scrimp on the level of detail you give to insurers."

Jackson-Obot remained on the stage to welcome Derek Smith, head of technology at Morningstar Wealth Platform, who highlighted the opportunity to use technology to reach people who had not yet engaged with an adviser.

His comments, along with those of his fellow panellists, are outlined in the news feature below by Chloe Cheung.

And if people thought the last session – an interview with Susan Ball, president of the Chartered Institute of Taxation – would be an easy way to end the day, they were wrong.

During the afternoon, the government had leaked its intentions to scrap the controversial 1.25 percentage point national insurance/social care levy hike, as well as unravel some of the IR35 reforms of recent years – so there were plenty of questions to field.

The day ended with some much-needed refreshments in 1888 – the Financial Times's restaurant.

Simoney Kyriakou