Andrew Elsden - head of professional connections development and chartered financial planner at Clarion Wealth Planning discusses Strategic Financial Planning and the Legal Profession...
“We frequently get IFAs in and often their seminar is just a sales pitch which, to be frank, isn't much use to anyone and is unlikely to encourage us to instruct them.”
This is a quote from a solicitor in a national law firm with whom Clarion Wealth Planning Limited corresponded earlier this year. It is, I fear, representative of many solicitors’ experiences of working with independent financial advisors.
However, not all advisors are the same. For some of us the delivery of long-term, holistic financial planning services has been the cornerstone of our entire professional careers. Furthermore, we have always recognised the importance of working in close collaboration with our clients’ other professional advisors – their solicitors and accountants – to achieve the best outcomes in any matters upon which we are mutually instructed.
Financial planning, as a profession, is relatively new. Although a minimum standard of qualification has been required in order to practise for around a quarter of a century, this has only been at QCA level three – roughly equivalent to “A” Level.
The Retail Distribution Review – the major regulatory change that came into force in the financial advice sector on 31 December 2012 – has among other things raised the minimum qualification to level four (equivalent to the first year of a degree). It has also tightened up the definition of “independent” advice and changed the basis of remuneration to eradicate the payment of commission to advisors by the providers of regulated investment products.
Arguably more significantly, since the introduction of the level six Chartered Financial Planner qualification by the Chartered Insurance Institute in 2005, those of us with the desire and aptitude to do so have been able to provide objective evidence to other professionals of our ability to stand alongside them on an equivalent footing.
At the end of the spectrum with which the legal profession can most valuably collaborate, we recognise that what we represent is not simply a channel into the world of regulated investments. We use our knowledge and experience to construct strategies for clients that address their long-term needs, with and without the use of financial products. We also clarify their financial situations in ways that can help their legal representatives achieve the best outcomes in the matters on which they are acting.
It is important, though, that both parties understand the processes and basic tenets that underlie each other’s practice. For that reason we are keen to carry out mutual knowledge assessments with the other professional firms with whom we work: we need to understand you and you need to understand us.
To help with this, we at Clarion Wealth Planning have been developing seminars for the legal profession that explain how the financial planning process works, and how our work intersects with and feeds back into that of other professionals. We have recently been approved by the Solicitors Regulation Authority as providers of structured CPD.
The provision of financial advice is one of the most serious responsibilities that any professional can assume. It is only right that it should be properly regulated. It is also right that those who recommend their clients to financial advisors should be granted as deep an insight as possible into how we work – and how we can work together.
Disclaimer: The contents of this article are a personal opinion and should not be interpreted as financial advice or as an inducement to engage in investment activity. Past performance is no guarantee of future performance. The value of an investment and the income from it can fall as well as rise and investors may get back less than they invested.