Thinking Time Again
My compliments of the season to all of you, and I hope you are all enjoying a peaceful, relaxing time. It doesn’t seem long ago that I was writing last year’s message, and those of you that I have been corresponding with for a long time, know that this period after Christmas and before the New year, I call “Thinking Time.” For many of us this is a time of reflection and planning for the year ahead.
In what has been an up and down year for most IFAs, I can’t let the old year disappear without mentioning Consumer Duty. I’m sure we are all tired of reading and hearing about it, but it does still continue to dominate the news. I believe there is still a great deal of confusion regarding its implementation and what its long-term effects will be.
Some IFAs, say ultimately it will lead to less choice, others that fees may have to increase, and if both are true, less choice and higher fees, that doesn’t seem to offer consumers much of a benefit.
I read only recently in FT Advisor that the number of IFAs willing to take on smaller customers is diminishing, maybe there is an opportunity here for advisors willing to step in and fill this gap.
What I do know is that 2024 is the year that IFAs will have to get Consumer Duty right, and whilst it may not be “Top of the worry list” I anticipate that the ramifications of these regulations will progressively manifest over the next twelve months. We are just at the beginning of these new rules, and I for one won’t be surprised if there are changes and further rules to follow. The FCA are determined to ensure good outcomes for consumers.
Perhaps this quiet time, is a good opportunity to review the plans you have put in place. I have heard that the FCA are actively beginning to visit firms to check on Consumer Duty implementation. In the case I heard of, they issued a week’s notice of their visit and provided an agenda for the meeting. They also requested a suite of documents to be provided in advance.
Interestingly, they wanted to speak to Managers, probably to check that the duty was becoming embedded in the firm’s culture.
So, what are the main concerns for IFAs going into the new year? Top of the worry list does seem to be IT, along with the ability to source new clients, certainly I believe all IFAs will have to examine their IT infrastructure sooner rather than later.
I have mentioned before, that the successful IFAs of the future will be the ones that have embraced the changes that our ever more complex world is demanding, changes that amongst other things will streamline communication with clients and help deliver better outcomes for them. In turn this should make IFAs life easier (that can only be a good thing) and possibly increase business revenues.
Whilst an increase in revenue is not always at the forefront of every IFAs mind, increased revenue does normally equate to a higher business valuation when eventually you do want to sell.
We have a whole team here that can help you make changes to your IFA business and the start of the year is the perfect time to begin.
As we say goodbye to 2023, I know that many IFAs will be thinking of developing a plan to retire. Perhaps regulatory burden is the driving force behind this decision. I urge all of you to think where you want to be in twelve months’ time and the steps you will need to take to achieve this.
If an offer arrives to acquire your business out of the blue, it may be tempting to just go for it. However, there will be alternatives, and unless you are fully aware of what is available for you, you will not be able to make an informed decision, and possibly may miss out on a more suitable opportunity.
If this is you, then please give us a call, even if you do not end up using our service, we will be pleased to at least outline for you the various other options that are available. There is no charge for any first meeting.
I hope like me you are looking forward to the New Year. Whatever your plans, I wish each and every one of you a highly successful 2024. We will be delighted to hear from you and wish to assure you that we stand ready to assist you in any way we can.