I have a serious suggestion to make that, if adopted across the adviser community, could make a real difference to how the public perceive financial planning firms.
As you will undoubtedly have seen, George Osborne’s idea for retirees to have access to “free and impartial guidance” is to be provided by ‘independent organisations‘.
And who is to pay for this? It seems a levy is proposed. A levy on regulated financial services firms.
In a separate and rather interesting development, it would appear that all books are going to be given away free, with printing costs to be funded by authors. And politicians will henceforth be required to work in the charitable sector without pay after they have left public office.
Is there another example of an industry being forced to fund a competitor set up by the State? I can’t think of one.
So why is this being allowed to happen? I’ll leave it to others to discuss the relative merits of adviser representative bodies. I have another theory.
I’m trying to picture George Osborne mulling over how to fund this free guidance he has promised. He can’t fund it through taxes – there’s an election coming up after all – so he has to find another way. Who doesn’t seem willing or able to fight back? Which group is disparate, disorganised and has an easy method of collection already in place.
Most importantly, however, whose clients are high net worth and able to handle a small rise in fees as the advisers pass on their increased costs to their clients? There’s the cruncher right there. Get adviser firms to pay, they will have to increase their fees and clients will moan at them, not the Government.
Which leads me to my suggestion. Why don’t we pass this levy directly on to clients. How about every adviser firm in the land write a letter to their clients advising them that the Government have asked us to collect some money from our customers in order to pay for free guidance to the general public. Include an invoice for the amount (simply divide the levy by the number of clients).
It would need all of us to do it, though. Every firm send the same letter. Get the story in the press. Make sure people understand that this is not a levy on firms, it is a tax. It might even be a pretty good tax, funding a good idea, that’s a matter for opinion. But it’s NOT an increase in fees by adviser firms to their clients, which is what a levy makes it appear.
If the idea works, we could do it again with the FSCS levy. ‘Here is the bill for your contribution the Government have asked us to collect which pays for compensation to clients for those adviser firms that gave bad advice and then were then wound up’. Focus might turn away from adviser firm fees and charges to why those failed adviser firms were allowed to give bad advice in the first place.
So, here’s calling all firms, all representative bodies. Let’s all of us write to our clients when the amount of the new levy is announced and let’s pass it straight on to the customer making it clear where it came from. Don’t let that anger stick on us, but pass it straight through back to the Government where it belongs.
In the sixties, Arlo Guthrie (son of Woody) released a humorous anti-war song called Alice’s Restaurant, about the Draft and who the army would and wouldn’t take. Its conclusion is that things will only change is enough people want them to. This is the end of the song, suggesting everyone should walk into the army recruitment office and sing the chorus of Alice’s Restaurant:
You know, if one person, just one person, does it, they may think he’s really sick and they won’t take him.
And if two people do it – in harmony – they may think they’re both faggots and they won’t take either of them.
And if three people do it! Can you imagine three people walkin’ in, singin’ a bar of “Alice’s Restaurant” and walkin’ out? They may think it’s an organization!
And can you imagine fifty people a day? I said FIFTY people a day . . . walkin’ in, singin’ a bar of “Alice’s Restaurant” and walkin’ out? Friends, they may think it’s a MOVEMENT, and that’s what it is: THE ALICE’S RESTAURANT ANTI-MASSACREE MOVEMENT!