Gizza job, I can do that.

The New Year is traditionally a time when many people reassess their professional roles and decide a change may be worth pursuing. For many people I suspect this involves looking for a new job – indeed recent research published by the Institute of Leadership and Management (ILM) revealed that 37% of workers say they are planning to leave their current jobs in 2015, a significant increase on the 19% who answered the same way in 2014 and the 13% in 2013.

But what about the financial advisory profession? How many advisers reading this article are considering a career change? I suspect very few although, given the average age of advisers, I wonder if most aren’t looking forward to retirement with some considerable relish. To be honest, I can’t blame those advisers who might be looking for an early exit – this job comes with some significant pressures to deal with whether they are in the form of regulation, increased costs, political interference, constant change, professional development requirements. The list goes on.

Unfortunately having to cope with these ongoing developments and the growing requirements placed on advisers has – in this country at least – somewhat detracted from the attractiveness of financial advising as a career choice. I am always interested in the ‘job reaction’ you get from people when you tell them what you do. How are financial advisers perceived? Are they thrown in the same pot as estate agents or journalists or parking wardens? I hope not given the job advisers do and the focus on quality and service.

Then again, the nature of what a financial adviser is and does has been systematically depowered by the continuous regulatory changes and developments. It is about to become even more confusing for consumers in April when a whole host of pension ‘Guidance agents’ are unleashed on the at-retirement market with only a requirement to have “some pensions knowledge” as the recent Citizens Advice job specification put it.

Of course it doesn’t have to be this way. Last year research conducted in the US by Rapacon placed being a financial adviser as one of the top ten jobs to have in the future. It is clearly a sought after career choice suggesting to me that the profession’s reputation across the pond is not just intact but strong and enticing to those looking at their employment. Can we really say the same in the UK?

So, how can we improve the reputation of the profession, ensure it is attractive to new blood, and develop greater consumer understanding of what advisers do, their value and worth, and why it’s a job worth having? Like most things, I believe it’s important to start with yourself. To that end, it’s about being the best you can be in your individual role which does mean self-improvement, lifelong learning, a commitment to continuous professional development, etc. If advisers are focused on self-betterment, on improving themselves and increasing their own standards, then this will clearly feed into the service they offer which will improve reputations and generate strong feedback and referrals.

Advisers need to be fully focused on their own roles which means not getting into a rut and instead retaining interest in the job and everything about it. Learning more and securing greater knowledge is a fundamental way to do this – we have recognised this for some time which is why we established a CPD library containing both structured and unstructured material which is easily accessible and allows the adviser to continually load up on new information. It will not only help the adviser improve their service offering but feed through into a growing positive reputation for the profession.

A profession renowned for its security, its prospects and the quality of its overall offering will clearly be attractive to those who are working in other areas or have yet to start work. While the legal, accountancy, and banking sectors have been tapping into the graduate market for decades, establishing these careers as worth pursuing, unfortunately the advisory community has not been working at the same level.

If we do want to bring new blood into our community then we certainly need to begin pushing and marketing the profession in a much more focused and structured way. Our professional and trade bodies must work closely together on developing an ongoing campaign that supports individual firms’ own recruitment policies if we are to raise the profile of being a financial adviser and make it stand out from the crowd. This should be a long-term commitment that highlights the positives of the profession and sets out the very tangible and compelling reasons for being part of it.

With the New Year being a time when many people consider what they should be doing next now is certainly the right point to secure our own professions’ future.



The blame for pain lies mainly in…

The buy-to-let market is never far from the headlines given there are still some deluded individuals out there who believe renting out property is some sort of ‘get rich quick’ scheme that requires no investment, resource, planning or brains.The facts of the matter are that it requires all those things and much more, and given the economic and lending environment of the past few years it has required them in spades.

Most recently we have the Bank of England requesting further powers not just for residential mortgages, but also the buy-to-let market, that will allow it to introduce LTV limits and debt-to-income ceilings on mortgages secured by landlords. It would seem that some believe buy-to-let lending is responsible for a multitude of sins – the stoking of house prices, the fall in first-time buyer numbers, the lack of house building in the UK and, most probably, global warming. All blame for these can apparently be laid at the door of landlords in the private lending sector.

This move by the Bank of England one might suggest paves the way for full regulation of the buy-to-let sector at some point in the future by the FCA. We are already getting partial regulation of mortgages taken out by ‘accidental landlords’ in 2016 when the European Mortgage Credit Directive comes into force and I suspect there will be a number who believe a sector which currently accounts for approximately 15% of all gross lending now needs to be fully regulated. The fact that buy-to-let is an investment decision and there is still no real clarity on who is actually being protected under statutory regulation, are questions that we still await answers on.

I sometimes feel like the powers that be believe the buy-to-let sector is some sort of ‘dirty secret’ they should be apologising for, when in fact it has been a particularly powerful and necessary force over the past decade or so. Of course, there were excesses in the lending community pre-Credit Crunch but thankfully those ‘practitioners’ have gone to the great buy-to-let lending graveyard in the sky and we are now left with a group of lenders who are practicing responsible lending to the nth degree.

So when I see David Cameron announce to the Conservative Party Conference that the latest addendum to the Help to Buy Scheme – the building of 100,000 homes offered to first-time buyers at below market value – will not be accessible to landlords as if they are somehow criminals, it makes my blood boil slightly. Because the fact of the matter is that without the private rental sector the ‘housing gap’ would be a chasm and the Coalition Government should forget this at their peril. With social and affordable housing levels having plummeted it has been the private rental sector that has taken up the slack and helped a roof over people’s heads that might otherwise have a complete lack of housing options.

The positives in all of this are that the buy-to-let market now has strong foundations upon which to build and I fully expect it to grow its lending share in the years to come. As stated above, it’s come a long way from its pre-Crunch days – landlords have to stump up a sizeable deposit to get a  mortgage (at least 20%) which means they have considerable skin in the game, whilst lenders have stricter criteria in terms of rental cover and have focused much more on ensuring arrears levels remain under control.

While the number of lenders active in the sector continues to grow – the launch of Fleet Mortgages next month adds another to the competitor pack – advisers have grown their knowledge base and are in a position to help and support their landlord clients like never before. Resources for advisers are readily available on sites like Panacea and specialist distributors are also active and able to help those advisers both new and established in the sector.

Given the positive nature of the sector at the moment, one suspects that not even the spectre of full regulation could dampen the spirits of buy-to-let practitioners, however these forthcoming rule changes will impact on businesses and firms should make sure they explore their significance and the cost and resource it will require to maintain compliance.

What happened to Howard?

What has happened to that well trusted and respected ‘we give you extra’ brand Halifax?

I am not sure if you or your clients have any recent experiences of paying in money to open up a 1 year fixed rate cash ISA? If their experience was anything like mine I suspect that in future the Halifax’s breathtakingly arrogant way of dealing with its customers will see a considerable reduction in new business.

The process to check if account details to pay monies into a Halifax account are correct goes something like this:

  • Dial a number from the website, the call is auto answered.
  • Then a message about caring about the customer experience is played and you are asked if you would like to provide feedback after the call, I so dislike that!
  • Wait for 10.41 minutes to get the call answered, this would not help in any post call feedback of ideas
  • The call is eventually answered by a female with a Liverpool accent so strong it was almost unintelligible
  • Security questions asked
  • Security passed
  • Account details checked and confirmed all OK- time taken now 14.38 minutes
  • The call centre assistant was then asked to check my wife’s account details were correct.
  • The response was that this was not possible because the computer screen only allowed one request to be actioned.
  • My frustration was expressed but the brick wall had been hit. Time taken so far 18.23 minutes
  • I asked to speak with a manager ; a sometimes dangerous move as I have a sense that any such requests often mean you being placed in telecoms oblivion, never to speak with anyone again until you redial and go through the whole painful process again.

At that point I was put on hold and after call duration of 20.53 minutes I spoke to ‘Dave’ (surname not given as it is not Halifax policy to do so). I asked him if he would agree that the time taken and the fact that two individual queries cannot be dealt with in a single call was an acceptable way to treat customers looking to deposit money into cash ISA accounts.

‘Dave’ had no view on the subject but did set about providing a view to a question that had not been asked. After three more attempts on my part to get an answer I realised that another brick wall in Liverpool had been hit. ‘Dave’ has no ability to think outside the script and as a result was unable or unwilling to commit to a view on the problems outlined. The call duration was now 24.49 minutes.

‘Dave’ very kindly offered to launch me back into the system to allow my wife’s account details to be confirmed. I graciously accepted and after call duration of 32.07 minutes a call centre assistant who could actually speak in an intelligible way took the call.

My wife was ID’d, questions asked, answered and fond farewells were said after 36.23 minutes.

I normally have some sympathy toward the problems that financial institutions have in dealing with calls but this Halifax example of caring, sharing beggars belief and should be seen as a masterclass in how to really upset your customers without even trying.

Halifax customer service, if my experience is a bellweather, is simply ‘shite’.

The ‘people who give you extra’ do not quantify what that extra is.

I can assist them in that department if they cared to listen, but as with all organisations that go big on brand image creating a real style over substance offering, they do not want to hear, they are incapable of a corporate listen. They talk the talk but fall over after the first steps of the walk.

Get grip Halifax, nobody should have to put up with this type of treatment.

Howard Brown left the Halifax in 2011, after bosses decided he was ‘too jolly’.

Well nobody is laughing now.



Still ‘Pete Tong’ at the FOS?

From the 7th July to 12th August this year, we conducted a survey amongst financial advisers asking them for their experiences of the Financial Ombudsman Service, its perceived fairness and how the overall complaint system could be amended in order to deliver greater efficiencies and fairness.

The survey received 183 individual respondents as well as a host of comments on each individual question, which meant the final survey report runs to 28 pages, showing the depth of feeling amongst the adviser community. We have provided a selection of comments with each question below to give a flavour of adviser sentiment on this topic.

Panacea has shared a copy of the results with Caroline Wayman, the new FOS boss, Mark Garnier MP, Andrew Tyrie MP, Martin Wheatley, Keith Richards, Chris Hannant and Otto Thoreson.

As a comparison we have also included the result summary of the 2011 FOS survey – most of the questions were asked in both iterations of the survey; be aware that no ‘Unsure’ option was offered in 2011, it was for 2014.

The 2011 survey, a pre-RDR, pre-FCA period, showed that something was seriously wrong with a system that was meant to be fair, open and honest, and where complaints that firms could not resolve were considered in an unbiased fashion based upon the evidence available and/or the balance of probability.

The time seemed right to revisit this survey as we now have a re-branded, re-managed regulator in place and a new boss at the FOS since Ms Ceeney resigned in November 2013 to join HSBC as head of its customer services.

The hoped for outcome of this exercise is that there is a recognition by both regulators and politicians that all is still not as well as it should be at the FOS and that something must be done to restore confidence in a system that so many see as wrong. And that view, we are sure, is not limited to the adviser community in isolation or just to do with the lack of longstop protection.

Consumers absolutely have rights that should be strongly protected, but in doing so the adviser consensus seems to be that those rights would appear to be taking precedent over everything else. Even, very worryingly it seems, to the point that if a consumer complaint is not possible to uphold on the basis of evidence available and/or probability, another way is found. And in some cases, if this survey’s anecdotal evidence is to be believed, this means the FOS re-engineering a complaint to create a successful one that the client did not make in the first place or had any issue with.

Confidence in a fair and unbiased Ombudsman service is vital and the right of all who use or engage with the service, the complainant and those complained about.

There is much concern both inside and outside the industry about the restoration of consumer trust and we agree that much still needs to be done.

We hope the positives can be taken from this survey may cause a pause for thought because right now many in the advisory community see that very little has changed since 2011 and part of that restoration of trust is to ensure that the ombudsman service is seen as as a neutral body and not an arm of the regulator that champions the consumer at all cost.

A particularly disturbing trend was the increase to the already large 2011 percentage (64%) of firms who had experienced false or manufactured accusations from complainants in an attempt to gain compensation?

This year that stands at 74%.

Comments from advisers on the question:

“When I suggested [the false claimant] should be sued for fraud I was told this would be ‘bad for the industry’s image’. It’s funny how the same standard doesn’t apply to  making false declarations on insurance applications.”

“In all claims to date both the client and the claims company have made blatantly fraudulent claims.”

“The adjudicator just accepted at face value the complaint from the ex-client, who produced no evidence to back up their complaint.”

Panacea Observations:

 “This is a frightening statistic and it does little in the support department for regaining trust in the industry if you are fighting a battle to see trustworthy behaviour from your clients. The ability for some consumers to lie knows no bounds it seems. In my own experiences I have seen this, with one particular example being a client who happened to be in a very senior position with the FSA at the time the complaint was made; when ‘memories’ were refreshed the complaint was dropped but the process was very stressful, something not understood by those who regulate. And stress is a big part of any complaint resolution process, for both sides. It is worsened however for the adviser firm when the complaint is simply and clearly a fabrication that could be recognised very quickly in the adjudication process but for some reasons often fails to be.”

Click here to download, free, the full survey results with all the comments.

Hit me baby one more time

How much more must the world of financial advisers come under attack?

Nearly 1,100 advisers have now voted on our poll “Will the removal of trail commission have a negative effect upon your business”?

90% say it will be catastrophic!!!

We have seen many comments like those below across a number of LinkedIn groups on the subject as well as our site:

“Does anyone know if the FCA has publicly given any view on Friend’s Life’s decision to stop paying trail and not passing back to the relevant customers either”?

“Trail commission is contractual on contracts already in force. It was disclosed to potential investors before they invested and one can only presume that they were content with it”. 

“Can someone please enlighten me about the reason for switching off trail if a change occurs with investments, which seems to be applied differently according to product provider. I have seen no explanation from the FCA why this has been introduced”?

“I think there is an argument for the regulator to ask companies that stop trail commission payments to justify why they have done so, in the interests of TCF”.

“I always viewed trail and renewal commissions as a form of contractual deferred compensation. The providers retain their business largely through the efforts of their reps/advisers/agents so they had to provide some inducement to maintain servicing . That inducement came in the form of trail and renewals. The less paid in trail and renewals the more vulnerable was their business long term”.

So, do advisers just sit there and let it happen? Does anybody care? Politicians are not interested until the FCA review happens.

You can read my mail trail to Mark Garnier MP on the matter. It spells out clearly the issues and why advisers would find the removal catastrophic yet he cannot do anything and neither can parliament.

This is like a house of cards about to fall down as a single ‘teeny tiny’ card is accidently touched!! An unintended consequence

What do you want doing about it?

When do you want it done?

As Britney sings ‘Give me a sign”! Because at Panacea Adviser we want to see some protective action now!