Financial plans are used to develop a strategy for living into a coherent proposal, to communicate ideas and concepts, to convince clients of the merits of a strategy, to enable the client to construct it or to be kept as a record of the completed work.
According to the annual survey from global leading PR firm Edleman, financial services remains the least trusted of all industries in all countries year after year.
What matters most to customers of these institutions would seem to matter least to the institutions themselves. When it comes to money, what matters most above all else - above independence, professionalism, service quality, range of products - to the holders of "the promise to pay the bearer on demand", is TRUST!
Without trust, nothing else matters.
See full Edleman Report for 2019 CLICK HERE
In 2013, under the UK Retail Distribution Review which resulted in banning commission on investment products, financial intermediary firms were given the opportunity to drop being selling agents for product providers, and instead be buying agents for their clients.
Nine in ten firms firms resisted change and continue to this day to take "adviser charges" from the product, and related the size of fee to size of sale.
Few firms, if any, were prepared to sign up to fiduciary duties when acting on behalf of clients.
It could be decades before our tireless campaigning for significant change has any impact.
Since the Retail Distribution Review, 95% of the population no longer have access to financial intermediaries on account of their limited wealth.
Only 10% of financial intermediaries provide their clients with a lifetime cash-flow forecast, with 'what-if' scenarios.
In other words, only 0.5% of the population have access to a financial plan. And, even those that do ... those plans are set against the financial intermediary's goal to grow their assets under influence (on which their fees are taken) rather than your goals of greater security and financial freedom.
By leaving financial planning to financial intermediaries, only 5 in every 1,000 have a plan. If you fail to plan, you plan to fail.
A couple of decades ago there were hundreds of thousands of intermediating financial planners. Today there are 26,000 in the UK. Many close to retirement.
The number of financial planning firms is declining faster. There are now just 5,200 firms. As costs of insurance and compliance are rising, profit margins are declining. The small high-quality boutique firms are disappearing rapidly, with advisers moved to larger commoditised firms.
The financial intermediation approach to financial planning is failing fast. Leaving a vast void - called the advice gap!
What is happening now is that non-intermediating financial planners are taking their place.
Three fifths of all UK Adults have no savings or savings of less than £5,000, and roughly one third of all UK Adults have no private pension. Furthermore, two-thirds of UK Adults have no life insurance or other protection cover.
Unsecured household debt will soon reach 50% of household income. Credit card debt takes over 25 years to repay at minimum repayment levels.
There are over 1,000 adults made redundant every day. There are over 4,500 debt problems reported daily to the Citizens Advice Bureau, with over 1,700 County Court Judgements daily.
A property is repossessed every hour. There is an insolvency or bankruptcy every five minutes.
Could it get any worse?
We live on average in the UK for 979 months.
200 in our youth. 200 retired. Many behind us.
Months fly by quickly. I'm sure you would agree. A month doesn't seem like a very long time at all.
Every month that goes past ... compound interest has less time to work its magic in the financial plan. The cost of delay is significant. The sooner you start your plan the better.
So, that's why now!
In the UK, financial planning is classed by the regulator as generic advice. It is therefore not a regulated activity, provided it is not given during or in preperation for financial intermediation.
What we need is more non-intermediating financial planners to plug the advice gap.
Contact us
+44(0) 7850 102070
or
email: steve@aolp.co
“There should be a wall, between advice and products, between advice and large institutions, and between our regulators and large institutions. We need an integrity that is impeccable. Until we actually institute a way of bringing good heart, great integrity and a fiduciary relationship that is sustainable into the industry, we are going to fail. We have to make this change, and we have to make it now.”
- George Kinder, father of the financial life planning movement.
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