We forecast a decline in the heavily regulated adviser-distributors, a cash cow. The regulator is clamping down on bad actors and the lifeboat compensation fund
sponsored by remaining market participants is facing a £1bn deficit in 2021. The rising cost of regulated intermediation is forcing smaller relationship-based advisers to sell up to the large
consolidating transactional-based adviser firms. Large firms run centralised investment propositions that are tapped into for fees. Returns net of charges fail to beat the returns available to
consumers direct. Transaction-based advisers are easily substituted by product provider "robo-advisers" or direct-to-consumer platforms, forcing down price and margins in a commoditised market for
advice and returns.
As Christopher Woolard, Financial Conduct Authority CEO, said in Septemeber 2020:
"The overwhelming majority of retail investors are best served by readily understood, well-diversified and low-cost investments which are already available from
a range of providers, but many retail investors don’t choose these. We are seeing some progress on reforms of governance and a focus on making investments better value for money, but
progress is still slower than we might like."
There is a rising star, the unregulated productless holistic planner. In some markets the regulator has split advice and distribution to accelerate the transition from
product-centred adviser to productless holistic planner. We too split advice from distribution. The result is a non-regulated activity we call non-intermediating financial planning. Regulation is
unnecessary as there can be no mis-selling in a productless service. Because we are non-intermediating, we can act as the personal regulator for the client.
“Consumers need to be able to invest with confidence: for major expenses, for a property and for retirement and care in later life.” - Christopher Woolard, Interim chief executive,
Financial Conduct Authority, September 2020, Call for Input: The Consumer Investments Market.
"Demographic changes mean more people are living longer. Social and economic changes mean more people are responsible for making complex decisions about how they invest their long-term savings
to enjoy in later life. Consumers have more choice of products and services than ever before. This new choice has many benefits, but some can be complex for consumers to fully understand, which
increases the risk of things going wrong. The nature of long-term savings means that when things go wrong, it is often too late to put things right.
We have made significant improvements to this market to protect consumers. But there are over 5,000 financial adviser firms and more than 27,000 individual advisers acting as intermediaries
between the consumer and their investment. Dominated by small firms, these complex chains of interdependent products and services – some of which are beyond our regulatory remit – make it easy for
bad actors to ‘hide’ and challenging for us to oversee.
The consumer investment market is not working as well as it should. Too often consumers receive lower returns than they should because of unsuitable products with high fees. Too often there
have been scams and scandals in this market leading to consumer loss. Too often consumers leave their savings in cash because they do not have confidence in the alternatives. That is why we have made
Consumer Investments a priority in our current Business Plan.
The overwhelming majority of retail investors are best served by readily understood, well-diversified and low-cost investments which are already available from a range of providers, but many
retail investors do not choose these. We are seeing some progress on reforms of governance and a focus on making investments better value for money, but progress is still slower than we might
Many consumers do not seek financial advice, perhaps because of complexity and cost. Many financial services firms seem reluctant to provide simple advice and guidance which will serve the
needs of large numbers of consumers. We need the system as a whole, including regulation, to work better for consumers.
Some of the most serious harms we see relate to investments outside our regulatory perimeter and online scams, many based overseas. We have limited powers and capabilities in this space, in
our ability to deal with online promotions.
We are seeking views to help us decide how our own rules and approach should address the harms in this market within the powers and resources we have, and where other partners may need to do
more to assist or where we might ask government to consider additional powers. We need views that help us to strike the right balance between consumer protection and consumer choice, bearing in mind
we cannot offer effective protection to consumers from products outside the scope of regulation."
Public Financial Regulation Has Failed
“Numerous scandals and incidents of malpractice – perpetrated by rogue individuals (think Maxwell, Madoff et al); or dodgy behaviour in particular organisations (think Equitable Life, Wells
Fargo etc.); or entire parts of the market (think endowment mortgages, transfers out of Defined Benefit pension schemes, PPI and so on); and even complete market collapses that have led to a decade
of austerity for innocent people (think the last Global Financial Crisis); have all contributed to the erosion of confidence in financial services.” - The Transparency Task Force, 2020.
The first line of defence for consumers is a patchwork quilt of trade bodies, professional bodies, and separate government instituted bodies, each with strict responsibilities and objectives aimed
at making financial markets work so that consumers get a fair deal. Yet still markets fail consumers. Still consumers fall through the gaps.
“It could be argued that it would be totally rational for the general public to NOT trust the financial services industry because the public have, in effect, been educated to NOT trust
financial services through the continuous drip, drip, drip of untrustworthy behaviour over a very long period of time.”
“Even after the mountains of money that have been spent by Governments (i.e.us taxpayers) on regulation, compliance and enforcement are we any more confident in the Financial Services Sector
behaving better now than it did twenty, thirty or forty years ago? The evidence suggests, no, we’re not. This is nothing less than a serious, systemic risk for society as a whole.” - The
Transparency Task Force, 2020.
Language like fraud and theft, failure of fiduciary care, misleading clients and secret commissions never get used in any regulator’s communications, nor are they implied. A shovel becomes an
implement, and the essence of meaning is hidden, and this makes it easy to hide misfeasance. The honest and ethical get lumped in with the criminal and immoral.
When all lines of defence fail, we are your personal financial bodyguard.
We are the second line of defence to help consumers get a fairer deal from financial markets. We are not part of the financial markets. We are separate from them. We place a wall between advice
and products. A wall between advice and large institutions. A wall between regulators and large institutions. We are the consumer’s independent personal regulator. We unmask the highway robbers and
create wealth in every area of consumers lives.
We give plans, not products. Plans to the unwealthy to create wealth through ideas, entrepreneurial spirit, and industry. Plans to the wealthy for financial independence and legacy.
We secure an appropriate degree of personal protection for the public from financial market misfeasance.
We campaign on behalf of consumers for improvement in integrity of the UK financial system.
We Are Like Your Personal Financial Regulator
We shine a bright light onto financial markets. We work to protect consumers. We protect customers by providing impartial generic advice and financial education. We educate consumers on how
financial markets work so that they get a fair deal and can deal confidently with market participants.
It is unrealistic to assume that everything that could be done to protect the public is being done. There is a very real need for more effective measures to deal with the growing problem of
malpractice, malfeasance, misseling, fraud, scams, and scandals. In short, far too many people are being harmed, in far too many ways.
That is where we come in. We are not financial market participants. This way, we eliminate conflicted interests and guarantee impartiality when acting on your behalf.
We believe there should be a wall between advice and products. That is why we do not carry out financial market activities. We do not give you products. We do not give you financial market
Financial Planning Does Not Have To Be A Regulated Activity
The gulf between the regulated definition of advice and any normal definition is huge. Regulated advice means recommending a specific financial product, such as a fund or life insurance company
investment or pension policy.
Recommending appropriate asset allocation to meet personal objectives, say 40% UK Equity, 30% Overseas Equities, 30% Fixed Interest, is definitely advice but not regulated advice as no product is
involved. Inheritance Tax allowance planning is the same. Lifetime cash flow planning, including you should be targeting a, say, 15% pension contribution, is also the same so long as no provider is
That leaves plenty of room for financial planners to provide a valuable service without giving regulated financial advice.
Further details can be found on the Financial Conduct Authority's website under its perimeter guidance manual.
We provide plans, not products.
We have you at the heart of how we do business. Our service is your protection. We put your protection above our profits and income. We put consumer best interest first.
We train and provide ongoing support for advisers, planners, and coaches globally for them to protect consumers from financial market participants. For them to give plans, instead of products.
Our members are trained and supported to plan in the right way, to protect consumers, to inform them so they can make the best decisions for themselves and put their best interest first.
Our protection work includes The Fraud Team, which helps consumers most vulnerable to investment fraud and victims of investment fraud. It provides tools to help investors actively check
investments they have been offered out of the blue. We also encourage consumers to report to us when they see potential harm or bad conduct.