Adviser Focus: Gillian Mackenzie

New recruit Gillian Mackenzie discusses the importance of qualifications.

Under the thick smog of warnings of a mass exit of IFAs unable or unwilling to deal with burdensome RDR requirements, Gillian Mackenzie has qualified as an adviser.

Just this year, in February, Mackenzie took her final exam that enables her to practice as a fully-fledged IFA under current rules.

But we all know those are changing.

And the 41-year-old, who works for Stockton firm W R Financial Management, isn’t one to hang around until 2012 to see whether the FSA will bow to pressure to relax its strict demands for a higher-qualified industry.

She has already completed three of the four exams necessary to achieve QCF Level 4, the minimum qualification level required to practice beyond 2012, and she doesn’t intend to stop there.

“I’ll definitely do more,” Mackenzie says. “Maybe not all eight, but at least six certainly, and some of the advanced diploma exams too,” she adds.

The former paraplanner completed AF3 in pensions planning last October.

Although her specialty is in pensions and retirement solutions, she advises across the spectrum, and believes fervently in the need to gain as deep an understanding as possible in every area, not least because that is what clients expect.

But also, she explains that when a client makes an appointment, you don’t quite know what you are going to get.

“If you just know about pensions, how do you go about helping with the other aspects of their financial well being?” she asks.

“With every client you get some sort of story, it’s rarely so clean cut that they have a certain amount of money that they know what to do with.”

In addition, she is convinced that the qualification specifications in RDR are merely the first step toward a gradual elevation of financial advisers to professional status.

“I’m just preparing myself for that.”

She sat the Chartered Insurance Institute’s (CII) J05, Pension Income Options, in the summer.

She recalls coming out of it sweating.

“It was not a particularly easy exam, but then none of them are,” she says.

“There is always a scenario in them that you have never come across yourself as an adviser.”

So, she admits “great surprise” when the results were disclosed, revealing a distinction.

To get a distinction, one has to achieve more than 70% in a CII Financial Planning exam. In fact, Mackenzie found out that she achieved 84%.

“I was very pleased, particularly because most of my clients are at or approaching retirement and the exam dealt with many relevant issues,” she adds.

Studying for the exam, which has a 90-hour recommended preparation time, greatly enhanced her knowledge of state benefits, which had been a weak point.

The frequent changes to laws governing retirement age and state pension benefits just over the past 10 years have made it difficult, often exasperating, for advisers to keep up to date.

It highlights the importance of examinations and the need for a formal CPD system, according to Mackenzie.

She sympathises with old school IFAs who have been practicing for decades and have had their noses twisted out of joint by the FSA’s stance on qualifications.

Many veterans feel that their tenure should count for something, but under RDR no IFA can continue advising without obtaining the relevant number of credits.

“The dichotomy of views over this issue does tend to be generational,” she says.

“But it’s just as important for experienced advisers to get back to the books because in this industry, there is constant change, whether it is products, compliance or legislation and there is no option but to keep up.

“The bottom line is being an adviser is actually extremely challenging. There is the constant studying, keeping abreast of developments in financial markets and with product providers and then actually making a living, never mind a home life!”

She adds: “So, I do think that under the cloud of RDR, it will come to crunch time for some advisers. Some will think it’s no longer worth the time, effort and financial costs.”

Over the past year, she has seen two advisers in her firm leave the industry. One went into property management and the other IT.

Mackenzie agrees that one-man-band IFAs will find it particularly tough.

W R Financial, which has 13 employees including two part-timers, is part of an alliance of about 40 IFA firms.

According to Mackenzie, this helps the firm achieve the critical mass necessary to survive in the post-RDR world without having to join a network, which would mean ceding control in many respects.

Through the alliance, the firm has set up a private OEIC for its high-net worth clients and also can also offer its clients an equity release advice service, which isn’t available in-house.

It also opens up a range of training resources for W R’s advisers.

So, Mackenzie is comfortable that she and her firm are on track to embrace the RDR.

But despite her cheerleading, she does have concerns over the side effects of the new regulatory regime.

The main one is that the changes are going to have the opposite effect of the FSA’s objective.

“The RDR was borne out of a desire to make truly independent advice more readily available to the public,” she says.

“But increasing compliance means added costs for advisers and that means client charges go up.

“Middle and lower-income earners will most likely fall through the net, which is ironic as it’s these people who need unrestricted advice the most and whom the FSA was meant to be addressing”

Ultimately the main problem is that the service financial advisers provide is not a “stress purchase”.

What Mackenzie means is that unlike going to a solicitor to draw up a will or going to an accountant to do your books, people don’t need the services of a financial adviser in the same way.

This means that people are much more likely to decide against the consultation on the basis of high fees than with an appointment with an accountant or solicitor, which is more likely to be perceived as unavoidable, even if they are perfect candidates for a financial planning makeover.

Advisers are also up against another obstacle: the culture of complaining.

“There are actually companies that exist to help consumers complain against products that they may feel were missold and get compensation,” she grumbles.

“Financial advice is always up for attack because it’s not a black and white solution.

“At least with increasing qualifications and the stamping out of commission, the hope is that this will enhance the value of advice in the collective imagination, elevating the role in the public conscientiousness beyond that of salesman.”

Top Business Tips

• Communication
• Keeping in touch is of the utmost importance. When the markets dropped, we put a communications strategy in place, updating our clients regularly via email. It is part of building trust and reassuring clients of your value as an adviser. 
• Be open to new ideas
• There are constantly new innovations in products, process and regulation. Your life as an adviser will be easier when you work out how to ride, rather than fight the waves.
• Don’t be afraid to lose unprofitable clients
• Sometimes you find that the amount of time you spend on some clients means that you are actually running at a loss. Rather reduce your client numbers and free up time for more profitable business.