The problems facing the adviser market are manifold. I am sure you are already familiar with them all.
Primary among the slings and arrows of outrageous fortune currently besetting the market is the issue of dwindling adviser numbers. The old guard of formerly commission-based advisers are slowly retiring or dying off; those that remain are having to take on a heavier proportion of the sector’s already exorbitant but burgeoning regulatory cost; and this burden is largely responsible for putting potential young blood off joining the industry. It is a vicious circle.
Against this backdrop Garry Heath has written to all the members of his fledgling trade body, Libertatem, urging them to use their response to the Financial Advice Market Review (FAMR) consultation process to lobby for his proposed solution – a separate regulator to deal solely with advisers, provisionally dubbed the Professional Advisers’ Regulator (Par).
This is an admirable idea and indicative of the type of positive action for which Mr Heath seems determined to use Libertatem.
It is undeniable that the cost of regulation has spiralled for the average adviser and it is refreshing to find one that has come up with a practical alternative solution rather than simply whingeing.
Libertatem is new, but is already making waves. It does not disclose member numbers but Mr Heath believes it to already be the biggest UK body representing advisers.
He concedes that the details of Par and how it would work still need to be thrashed out. The only goal at the moment is to get the proposal into next year’s Budget speech; the nuts and bolts can be worked out later.
He is not even sure of what the impact would be on advisers’ regulatory costs, but, he argues, it has to be somewhere south of the £75m that advisers collectively currently pay each year.
Whatever the details, this demonstrable keenness to wade into the debate – and drag other advisers with him – should ensure Mr Heath gets a say if and when those details are decided.
This is a good idea and it is great that Libertatem is prompting and driving debate, lobbying on behalf of a sector that has been arguably underserved by its existing trade bodies.
But while I applaud someone finally sticking up for your interests, I can’t help thinking the proposal will only solve advisers’ problem, rather than advice’s.
It would reduce the costs faced by IFAs and possibly free up some time spent on admin, but it would not tackle the shortage of advisers that we currently see.
The Treasury wants more people to get advice – a desire shared by Mr Heath and, I would have thought, most advisers. It is a logical step that more advice will, in turn, need more advisers, not the dwindling numbers we see today.
