Kim North: What’s in a (adviser) name?

Amid the tidal wave of headlines from Westminster this month, some news from the Financial Conduct Authority caught my eye.

The regulator has announced it is working with The Investing and Saving Alliance and the Association of British Insurers to try and find examples of areas where the difference in advice and guidance is causing problems.

It says the boundary is an issue that has been raised over a number of years.

In failing to meet deadlines in 2021/22 for authorisation applications, money laundering registrations, variation of permission, change in control permissions and bringing in paralegals after facing significant delays in its response to freedom of information requests, the regulator has lots of projects to catch up on. So I do wonder where it will find the time and resources to fully research the distribution of financial products and advice.

Nonetheless, it is clearly an area the public needs support with.

When I talk to people about the difference in guidance and advice, I tell them 98% of advice is guidance but the most important 2% is looking at which product and provider is right.

The cost of that very important 2% is now far too expensive – and moving upwards. This is not the fault of the adviser but of their external costs to trade.

Those who have above average wealth can afford to pay for regulated, personalised advice. But most of the UK population cannot.

According to the Money and Pension Service, 47% of UK adults do not feel confident making decisions about financial products and services. So, what can we do?

First, we need to drop the many titles of distributors when addressing the public, as they just don’t understand them.

I have a lifetime career of providing advice, starting with direct sales, then as an appointed representative, setting up an independent financial advice firm, before joining a financial planning certified and chartered firm. My changing titles do not matter to people. It’s all about which products, investments, tax mitigation, later lifetime advice or planning they ended up with.

To this end, there also needs to be a regulator-supported triage service – both virtually and face to face – for the millions who need advice. The service would guide the individual or company to the most appropriate distributor of products and services after answering a handful of questions. Is it direct sale, a tied adviser or a whole of market adviser?

It’s about time we had true direction from leading research and marketing experts to help show the regulators what they need to do to get millions more confident approaching those that can help them manage their money.

Kim North is managing director at Technology & Technical