By Casey Mills
Put simply the answer is obviously NO. As with any professional service industry there are clear differences in the services being offered and areas of specialism. But, if you were to look at the answer from the perspective of the minimum qualification standard, mechanism of remuneration, compliance and regulation regime, and the continuous professional development (CPD) requirements, the answer would be YES.
It seems from the perspective of a new client or the media, all IFAs are the same. And whenever there is any form of wrong-doing in the provision of financial advice, all advisers are tarnished with the same irreverent rhetoric.
This doesn't reflect the reality: the range of options available to consumers looking for some form of financial advice, whether that is pure product-based advice, financial planning, investment management, or wealth management.
For a start, not all financial advisers are IFAs as some don't provide independent whole of market advice. It doesn't mean one is better than the other, but they are different. In my personal experience potential new clients seem to believe all advisers are pretty much the same until they meet an adviser who takes an interest in them and their lives beyond money.
Ultimately once the service offered matches the needs of a potential client it all comes down to people, trust, and relationships. As any financial adviser client relationship will last for many years, you just need a connection between client and adviser.
In early 2000 when I joined the industry, products were king. Financial advice was beginning to increasingly focus on the gathering of AUM, whereas new shiny pension and investment products were being sold alongside innovative investment funds. An AUM-based fee enabled advisers to earn income through an ongoing service.
The shift from products to fees seemed to be the first step towards a transition away from the direct sales days and a baby step in the direction of a financial advice profession.
But the sale of a product to generate commission has been at the heart of financial advice for so long that this small step from a commission-based remuneration model didn't seem to be enough.
Then the Retail Distribution Review (RDR) arrived in January 2013 and the small steps became one seismic leap over a newly formed regulatory chasm. Although this halted the work of many wonderful financial advisers, it also accelerated a journey towards creating a true financial advice profession.
Now in 2020 looking back at the last seven years and following the initial fallout of the implementation of the RDR, I personally believe that all financial advisers are NOT the same.
As some are providing transactional advice to those people most in need, specific niches are being served, financial planning is burgeoning, and the robots are coming! With the commoditisation of large elements of the financial advice food chain, AI, Robots and intelligent automation must have a role to play.
There is real opportunity for various financial services professionals to define what it is that makes them and their service different. Which ultimately can only benefit those people who are looking for financial advice.
Additionally, we need to do more work to fight against the practice of not putting clients' best interests first. Luckily, I believe this is the minority of financial advice.
As financial advisers we truly are in a privileged position where we can become a lifelong trusted adviser. We help our client families through decades of their lives and the many different challenges ahead; retirement, illness, divorce, loss of a loved one, children, grandchildren, redundancy, and ultimately death.
It is a unique profession that has immense value which changes peoples' lives. Where there is nothing wrong with being different.
Casey has worked in financial services since 2001; he established TFP Financial Planning Ltd in 2015 alongside Ian Jones. Read his full bio here.
