Rise of internet sees number of HNWs using IFAs halve

Oh Yes?

Another piece of dubious research from a management consultancy obviously punting for business. Probably written by an MBA (Master of Bugger All). How many of the HNW web browsers are retired? In my experience HNW individuals just don’t have the time to mess around like this. The majority of my clients are well able to DIY, but chose to use me for convenience. I don’t pretend to be clever clogs or give myself an inflated title – Wealth Manager or Financial Planner. I’m just a facilitator and (if you like) a paper shuffler who makes their lives easier. Do you really believe that these people will first gen up on all the arcane rules to ensure they are doing the right thing? (Carry Forward – life time allowance – bed and ISA – CGT planning – trusts – IHT mitigation and so forth) What next HNWs who do their own hoovering and car cleaning?

Posted by: Harry Katz

What is the point?

This is an interesting article as much for what it doesn't cover. The last paragraph probably covers the real areas in which there has been a movement away from IFAs, namely in the area of investment portfolios. Could it be that since the credit crunch a lot of people who would have delegated portfolio management to a third party now have sufficient time on their hands, i.e. they are out of work to either do it themselves, or no longer have the money to manage. And what about tax strategy, will strategy, and protection insurances. Have they suddenly become amazing competent in those areas, or have they become irrelevant? And were do these people find execution-only sites for whole of life policies, pension schemes, income protection, enduring power of attorney. Or have these potential clients become aware of the cost implications of RDR and decided that it may be cheaper doing it themselves. If this were an explanation it would put a large question mark on the benefit of raising standards and changing charging strategies. Focus groups are fine for producing reports, but real life tends to produce a truer reaction. "… removes the appeal of IFAs in some cases". Well according to AT Kearney some equate to 50%, or is it 33%. And with 80% of the HNW population now looking after themselves I don't understand why the FSA are so focused on the Adviser market. 80% are doing it themselves, according this report, so if there are problems it must arise directly from the providers themselves. But wait. The providers may be advertising, but they are not selling; most direct sales forces were disbanded years ago. So, at some level, it must be the consumers themselves that are at fault. How does one go about regulating the consumer. Do they have to take exams before buying a product? Or perhaps they need a licence to prove they are competent enough. I love these reports. It would be interesting to know why it was commissioned because it appears to throw up more questions than it answers.

Posted by: Glen McKeown