Fundamentally, it’s a career for a pro-social, people person and it’s one that the government wants to see grow.
Why is the government keen on financial advice? Retail financial services offer many complex products that most people lack the time to really grapple with.
But, unless they are lucky enough to inherit a home, and also happen to have a defined benefit pension scheme, at some point (and much sooner than most of us think) everyone needs financial advice.
The consumer duty regulations, which have just come into force, aim to take some of the sting out of the complexity of retail financial services. But the regulations are not intended to do that by making the services on offer less nuanced or complex.
They will work in the interests of consumers by requiring firms to “act to deliver good outcomes for retail clients”.
All firms will have to: act in good faith toward retail customers; avoid causing foreseeable harm to retail customers; and enable and support them to pursue their financial objectives.
Importantly, they will have to make sure that consumers really understand what they have signed up for and they will also have to offer those consumers support.
Getting all of that right will mean having excellent financial advisers. Not all existing advisers are willing to face the challenge – or the threat of liability.
According to the Lang Cat Advice Gap Report 2024, 55 per cent of advisers who responded to the survey had already stopped serving clients because of the new consumer duty rules.
The reality, though, is that the consumer duty rules set a professional bar of which we should be proud.
Doctors are required to first do no harm. Financial advisers are now required to do some good.
Who wouldn’t want to be part of that?
John Somerville is director of financial services at LIBF
