The growing financial advice divide

Thursday, 17th February 2011 15:22 - by Resident IFA

This time last week, I was conscious of an evening appointment to come, having already visited a gentleman in the morning. Both people were new to me, the best way to describe them being ‘potential Clients’. So far, so normal. Yet, by the end of the day, I found them to be staring at wildly differing financial futures and planning needs. The first man had sold his share in a successful company. He had loaned money back to the owners of the company to receive a good rate of interest; healthy balances on deposit; owns his property (and 1 other) unencumbered by debt; and has respectably-sized Pension plans. He required advice on Investing and securing his retirement income through use of some of the deposit balances and the Pension plans. The second man (approximately 5 years older at 66) had a small Pension fund (circa £30,000); he was still in full-time employment; and was moving from his rented property in the next few days as his Land-Lord had decided to move back in. The first scenario was of someone who had a comfortable amount of money and has a pleasant retirement in store. The second scenario was of someone who will rely largely on the State for their retirement income, it seemingly being a subsistence-level existence to come. Now, these are examples of life – the Have’s & Have-nots. What interested me was the ability to receive ongoing financial advice, especially in light of the changes the Independent Financial Advice sector will see on 1st January 2013. I think not only this – where Clients will agree a transparent Adviser ‘Fee’ for advice, rather than Commission – but also that IFA’s are now a little more savvy; better understanding the link between their time and profit. Countless times have I given my time to help someone. The second gentleman above is a prime example. I drove to his home in the evening, then spending three-quarters of an hour dispensing all the knowledge I have to help him – pitfalls, way forward, options, etc. I did not charge him a penny. I believe that all people should be able to receive advice from a qualified Adviser. The problem potentially comes when they do not have the means to fund it. Should it be Government-sponsored? Should my other Clients – such as the first gentleman, above – effectively subsidise other, less well-off Clients? Should I consciously hive off some time to undertake pro bono advice? As interesting situations often dictate, there is not an easy answer. Not a one-size-fits-all answer. I guess, for the time being, I will continue my efforts to be a ‘nice bloke’ and help all & sundry as much as possible, regardless of the cut of their cloth or financial situation in which they find themselves. Until next time...