There are conflicting messages emanating from the financial services industry at present. On one hand, the market for mortgages and wider financial services is enjoying a purple patch as favourable as any I can recall. On the other hand, the client-oriented demands placed upon advisers continue to burgeon. It may be the onus of dealing diligently with these demands that prevents many advisers from finding the time to focus on their own career options.
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While I would encourage any adviser to set aside some time now and again to review their career progress and consider the options that may be open to them, I understand the difficulties of doing so. Ever since the Securities and Investments Board, predecessor to the Financial Services Authority (FSA), issued its first tome of a rulebook two decades ago, advisers have had to keep pace with a plethora of well-intentioned, but tortuous regulatory requirements and the costs that go with them.
A whole new industry
The FSA’s ‘Treating Customers Fairly’ directive, which appears at first glance to be an obvious statement of good practice for any adviser intent on survival in the industry, is yet another in a series of demanding initiatives from the various regimes that have overseen the industry in recent years. The financial services world has even spawned a whole new industry that has at times threatened a takeover. That new industry – compliance – has drained cash and energy from even the most stalwart of advisers.
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If compliance were the only thorn in the side of advisers who just want to get on with serving clients to the highest professional standards, things might not be so painful. The cost of professional indemnity insurance has seemingly risen exponentially in the wake of the actual and alleged mis-selling scandals. Add the effects of ongoing government action, such as extension of FSA jurisdiction to cover mortgages, plus increasingly demanding provider requirements, and it hardly seems possible that advisers have time to talk to clients, less still manage their own careers.
Business and personal development remain crucial to the interests of clients as well as advisers. Keeping pace with market trends and innovations is all part of the broker’s role, as regards both giving of the best advice now and the planning of long-term objectives to ensure the ability to give the best advice into the future, whatever changes to the market occur. Some advisers who look into the future are understandably daunted by what they can see through the darkness and fog.
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So, going it alone in financial services in 2007 is verging on mission impossible. There are, however, alternative approaches that could open opportunities for a ‘trapped’ adviser wanting to beat a new career path or a highly experienced adviser frustrated by a business that lacks direction. There are options too for advisers who have reached a state of readiness to exit the business and obtain maximum value for the fruits of many years’ effort.
Four traditional avenues
Commonly, there are four avenues open to an adviser seeking a change of direction, all of which have their strengths and weaknesses. One is what might be termed as corporate, by which I mean the financial advice arms of the big banks. Although these inevitably provide high levels of brand awareness among consumers, the adviser has to forego autonomy. Then there are the national broker operations.
A third option includes network operations, whose service is geared to regulated mortgages. The fourth avenue, and at the opposite end of the spectrum to the corporates, is service providers, which aim to offer advisers independence and autonomy to build their own business. However, unlike the corporates, they can’t provide ‘consumer impact’.
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For any individual pondering a future along one of the four traditional avenues, it can be difficult to identify the one that ticks most of the right boxes and many advisers have historically had to settle for second best. As is so often the case, the best option lies somewhere in the middle – for example, ‘small enough to care, but big enough to matter.’
One key element a specialist mortgage intermediary needs in order to assist future business development is the ability to cater for clients’ other needs by offering multiple products and services, although not transacting all personally. Other vital features include: good day-to-day support; sales-based environment; transparent commission structure; practical compliance attitude; flexible IT proposition; and true business planning guidance.
When you have identified a company or network that best meets your shopping list of wants for the future, do not let the demands of day-to-day business distract your sense of purpose about getting your career back onto a path of your own choosing.
