Treating The Client As The Customer.

Customer-centricity is becoming a key focus, and millennials and Generation Z will play a big part in the shape of things to come.

Why Place Client Best Interest First?

Product Centred Financial Planning.

Product Centred Financial Planning is where you treat the money as the client, not the customer.


Client Centred Financial Planning.

Client Centred Financial Planning is where you treat the client as the customer, not the money.



Product-Centred Financial Planners:

  • These are adviser-distributors, that is, intermediaries holding agencies with product providers.
  • The advice of these advisers is limited to product advice.
  • ISO 22222: 2005 defines the personal financial planning process (for product advisers) and specifies ethical behaviour, competencies, and experience requirements for personal financial planners (product advisers).
  • These advisers are PRISM sellers. Protection, Retirement, Investments, Savings, and Mortgages. They seek to establish shortfalls in these product areas through needs analysis. They recommend products to fill the gaps. They sell products.
  • Eight out of ten of these advisers charge initial asset-based fees. Nine out of ten advisers charge ongoing asset-based fees. They earn fees based on a percentage of assets sold. There is a transactional focus. A transaction bias. Remuneration is conflicted. Here the adviser is always seeking a product sale, as that is how they get paid.
  • Advisers are sat on large books of legacy assets taking clips on funds for doing a lot, a little or no work. There is a lot at stake financially for the adviser and their family to switch to advice-only models. Many won't.
  • Conflicts exist between their interests and those of their clients. Advisers must wrestle with their conscience about client outcomes. For example, should clients pay down the mortgage or invest if they enjoy a windfall? If they did the former, the adviser does not know how they would be paid.
  • These planners manage wealth with their products rather than create them. Products manage wealth already created.
  • Investment returns are lower on mutual funds accessed through these advisers, as their fees clip the net asset value.
  • These advisers target the rich by setting investable asset thresholds below which they will not engage with the client. These advisers disintermediate ninety-five per cent of the population because of their limited wealth.
  • This route is heavily regulated. Advisers are registered product sellers, so their conduct can be monitored and managed.
  • Consumers here do not have their lives well planned and are asked instead to hand over their assets. Trapped on the treadmill of work for 50 years, advisers can tap into their assets with the promise of helping them find happiness in the last sixteen years. A bet most will lose. Many clients face a cliff edge of lost meaning and purpose at retirement, which can seriously damage health and well-being.
  • Over the lifetime of multiple adviser relationships, consumers are left with, often forgotten, orphan assets in closet-tracking high-charge funds. Or are churned from platform to platform incurring unnecessary adviser fees and transaction charges. Data is captured and replicated on multiple distributor platforms adding to the cost. Arrangements are inefficient and not portable.
  • Four in five of these advisers are carrying out regulated business on behalf of someone else, either as an appointed representative of a network or an employee of a national or one of its subsidiaries. These other parties also seek to tap into the client's assets and take their cut.
  • Here there are many layers of unnecessary middlemen tapping into client assets: intermediary, intermediary back-office system, intermediary network, intermediary centralised investment proposition, an intermediary platform, product wrapper managers, collective investment managers, underlying investment managers, custodians, nominees, stock exchanges, traders, taxman, and more.
  • These networks and nationals run their centralised investment propositions to clip net asset value, a practice known as "asset hoovering". They hold billions of pounds in these propositions. St James' Place £13bn. Quilter £10bn. Hargreaves Lansdown £7bn. Openwork £3bn. Tenet, Succession, Investec, In Partnership each £2bn, etc.
  • The life companies and asset managers where the client's funds are placed hold shares in the networks and nationals, so double clipping the client's assets for fees.
  • Advisers using centralised investment propositions often portray themselves as "independent" when they are not, in the true sense of the word, independent of product providers. Instead, they act as their agents rather than your agents.
  • The networks and nationals insist that advisers levy asset-based fees, and fee-for-service is often prohibited. These nationals and networks ban advisers from setting up separate Client-Centred firms.
  • The cost of this advice is high due to being one-on-one, hassle, red tape, cost of regulation, and multiple fingers in the pie.
  • This advice is protected by insurance, an ombudsman, and a compensation scheme for an ever-increasing premium. Provided the adviser is acting within permissions, has paid the insurance premium, and is still in business when the claim is made. Often investors lose such protection when things go wrong. In the UK, only 20p in every £100 lost in investment scams is recovered.
  • This product advice market is a cash cow fee fest with the market outlook diminishing.





Client-Centred Financial Planners:

  • Generic financial planners are not agents of product providers.
  • The advice of these advisers is limited to generic advice and financial education.
  • They act as fiduciaries. Those who place the client's best interest first. They are the best regulators, protecting consumers from financial market participants because of the way they are incentivised.
  • These are fee-for-service advisers. Relationship-based. Non-conflicted.
  • All they sell is plans. For the unwealthy, the need is often to create wealth. These advisers provide wealth-creation strategies in their financial plans.
  • Because advice is generic, they can advise groups in training classes or even remotely with eBooks and videos. This lowers the cost of advice provision. Democratises financial planning to the masses and plugs the advice gap.
  • Where products are required, these advisers educate the client on how to use direct-to-consumer platforms to access commoditised investment returns.
  • Investment returns are higher than the intermediated route, as there is no fees clipping net asset value.
  • There is no risk of mis-sale, as there is no product sale. There is no need for this route to be heavily regulated as there are no salespeople. In virtually all markets, these advisers are often not required to be registered with a conduct monitoring authority. They are, in practice, the client's best regulator.
  • Here the data sits with the consumer on a client-centric platform (HapNav - The Happiness Navigator!), as it should in a GDPR-compliant world. Data is captured once and shared with multiple advisers at any time or throughout the historical lifetime. Lowering transaction costs and improving customer lifetime values. The model is efficient, and adviser relationships are portable.
  • Many hundreds of thousands of pounds can be saved by consumers over a lifetime by removing unnecessary fees of intermediaries.
  • Consumers can plan a more contented life. And live longer and better.
  • The cost of this advice is low, cutting out red tape and the need for regulation.
  • There is no specific advice about the buying or selling of investment products. There is no premium for the insurance ombudsman or compensation scheme. There is no mis-selling as there is no selling. The adviser is unconflicted and acts as the best regulator on behalf of the client.
  • This general advice market is a rising star with market drivers politically, economically, socially, technologically, legally, and environmentally all acting in the adviser's favour.


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