5th July 2013

Aegon: Advisers - the challenge ahead

It saddened me recently, to see that, due to poaching, the rhino is near to extinction in Mozambique. However, it would appear they aren’t the only endangered species, as the number of financial advisers in the UK has plummeted dramatically after RDR. The first analysis of the impact of RDR and the demands of the new service-driven world has suggested that the total number of retail investment advisers has fallen 23% from the 40,566 estimated by the regulator at the end of 2011 to 31,132 at the end of 2012.

This validates the general consensus that we’ve lost about 20% of advisers who didn’t enter the post-RDR world. There are a number of reasons for this. Many have retired or sold their business, while others decided that the exam criteria wasn’t for them. Some didn’t have a business model fit for the future.
Our world has changed and will never be the same again. RDR is not, and never will be, about exams and qualifications. It’s about delivering a service clients are willing to pay for, now and in the future.

Many advisers who have gained their diplomas and secured their Statement of Professional Standing, are now realising that they perhaps don’t have a proposition that’s allowed them to adapt positively and profitably to our changing world. Many have survived the first quarter of 2013 by having a healthy pipeline of pre-2013 business, and from benefitting from the last days of commission. These days are now over. Do they have a business model, client proposition and communications strategy to allow them to continue to survive?

It would appear that the latest research from Ernst and Young says the answer is no. Ernst & Young say adviser numbers will drop to 20,000 in 2013.
Success for any business in a service profession has to be about identifying what clients and future customers want, and delivering this profitably — not just once, but on an ongoing basis.

No business can do this without a proposition and plan of action to take advantage of the many opportunities we face in UK financial services. We have an ageing population, a roller-coaster economy, auto-enrolment and the rise of social media. Each one full of opportunity for every business, if they’re prepared and ready to take advantage.

The fact is there isn’t enough qualified financial advisers to meet the advice needs of the baby boomers and the many employers facing auto-enrolment. We also have a whole range of technology platforms, all designed to help advisers in both the individual and corporate markets.

So why are so many businesses failing to take advantage of these opportunities?

Seeking the answer, I am reminded of the great quote from Thomas Edison:

'Good fortune is what happens when opportunity meets with planning'

The key to success in life and in business is about having a plan. Be honest. How robust are your business action plans? Do you even have one? If you don’t have one, then how will you take advantage of the opportunities which are all around you? The future of any business really does depend, positively or negatively, on how they plan for the future.

Our business brain website can help you with basic action planning and goal setting techniques, all designed to make sure that your business adapts to the challanges ahead, and is in a position to take advantage of the many opportunities we all face. I would urge you to visit it now.
 

John Joe McGinley
Head of Business Brain, Aegon
May 2013

Business Development