Institute of Financial Planning

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Institute of Financial Planning

• Nick Cann ACIB CFP
• Chief Executive

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Agenda

• RDR update
• How will this effect business models
• Who will be the winners
• Five takeaways to think about

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Potential Market After RDR
Advice
Sales
No Advice
Financial Guides
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Advice requirements

• More clearly seen to be operating in the best
  interests of clients
• Includes focused advice
• Product providers have no role in determining
  remuneration
• Recommending products from across the whole of
  market
• Higher minimum professional standards than
  currently

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FSA statement

• Challenging the industry to develop and implement
  an agreed common framework for professional
  standards.

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IFP view slightly different

• Still a need to identify the role of Financial
  Planner
• Differentiation between strategy, advice and
  sales to better reflect the market
• Financial Planner becomes different, specific and
  properly defined segment of the advice segment
• Momentum needs to be maintained in the UK with
  the building of a profession
• IFP happy to work with other professional bodies

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Financial Planning

• Financial Planning is the process of developing
  strategies to assist clients in managing their
  financial affairs to meet life goals. The process
  of Financial Planning involves reviewing all
  relevant aspects of a clients situation across a
  large breadth of Financial Planning activities,
  including inter-relationships among often
  conflicting objectives.

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Criteria for a Financial Planner

• Meeting the requirements of the Financial Planner
  Job Competency Profile
• Subject to greater level of disclosure
• Able to offer both breadth and depth of service
  to clients
• A higher level of competence and technical
  ability
• Member of an appropriate professional body
• Clearly putting clients interests first
• Has proved that they can provide a comprehensive
  Financial Planning service
• Ability to carry out cash flow modelling

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Future Financial Planning Businesses

• Boutique firms
• Man from the Pru, AXA, Standard Life, Co-op and
  others
• Segmented division of regional/national firms
• Private client teams
• Accountancy businesses

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Winning criteria

• Capital
• Vision
• Strong Leadership
• Clear proposition and differentiators
• Structure, process and systems
• Appropriately qualified teams
• Remuneration structure based on the nature of the
  business

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Boutique firms

• 1-5 Financial Planner professionals
• Ratio of 13 plannersupport staff
• Increasing levels of recurring revenue
• Significant amount of outsourcing
• Integrated back office and wrap technology
• Clients will be those with minimum assets of
  100k or significant incomes but need objective
  financial planning support

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New Style Business Model
Client Facing Planner
Paraplanner
Administration And Support
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How do advisers spend their time
... where do most clients perceive value?
Where advisers spend their time
What clients value
Financialdata gathering
Planprep
Review ongoingservice
Relationshipmgt
Productadvice
Implement admin
Dataanalysis
Presentplan
Source Cerulli AssociatesFPA Principal Member
Survey November 2002
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Skills Set
Relationship Management Excellent Communication
skills
Good eye for detail Good technicians Good Team
Player
Efficiency Good Team Player
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National Firms

• Focus on consistent process and efficiency
• Well segmented proposition
• Fee based
• Well qualified
• Brand building
• Well capitalised and profitable
• Competing in the private client space

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Man from the

• Aspirationally competent Financial Planning
  professionals from a graduate/equivalent
  background
• Focus on providing the Financial Planning service
  products delivered by platforms and structured
  portfolios etc.
• Significant support from paraplanners and
  tele-team based centrally or abroad.
• Clients household incomes from 25k or assets
  of 25k
• Delivers greater client service and increase of
  funds under management
• Modern day tied sales force with the ability to
  become independent advisers

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Five Takeaways

• Revisit or set out Business Plan
• Consider technology support
• Join a relevant Professional Body
• Consider meaningful qualifications
• Book time in the diary to study and take
  examinations
• Look at the paraplanner role

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Business Plan

• Goals and Objectives
• Clarity of proposition
• Target clients or market segment
• Technology
• End game

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Technology Support

• Wrap or appropriate platform support
• Back Office
• Gadgets
• Integrated solutions
• Paperless?

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Automating the business
Advice process
Client Service
Management Control
Marketing
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Belong to a relevant Professional Body

• Join and contribute to the profession
• Great support environment
• Robust and relevant CPD programme
• Bound by code of ethics and practice standards
• Relevant networking conferences and events
• Relevant qualifications and learning support

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Meaningful Qualifications

• What jobs are people doing and what competencies
  do they require
• Certified Financial Planner accreditation
• Paraplanner licensing and accreditation
• Development of a Financial Planning degree for
  2009 with Manchester Metropolitan University

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CFP Job Competency Profile

• Moves from a list of exams
• Defines the career path for a Financial Planner
• Allows a curriculum to be built to better
  represent the job that needs to be done
• Enables a broader debate with the providers of
  education
• Links into a global competency standard

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(No Transcript)
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What is the CFP Licence ?

• Recognises the 4 Es
• Education
• Examination
• Ethics
• Experience
• True Professionalism

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ADVICE AND ADVISERS YOU CAN TRUST!
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Benefits of the CFP Licence

• Says what you do on the tin
• Understood by other professionals
• Very appropriate qualification in todays world
• Seen and valued as a professional
• Transferable between affiliated countries
• Peer group days of training and discussion
• Commercial Make more money
• Appreciation by quality media
• Registry High quality of referral

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Paraplanner Role

• Vital for business growth
• Professional Services Model
• Brings new people into the business
• Will serve as career paraplanner or trainee
  planner depending on competencies

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Thank You and Questions

• Come and see us at stand 109
• Ask about the Art and Science Conference