BOB WOODS SPEAKS POST-BUDGET 2016 ON THE NEED FOR ADVICE IN THE FINANCIAL MARKETPLACE.
We have built the Mattioli Woods Group firmly as an advice-led financial services business, and one with a strong and growing ability to not just advise, but to deliver the solutions our clients need.
Proactive, expert, and personalised advice develops strong good will, and with the provision of product solutions, benefits clients in delivering a ‘joined up’ premium service, and shareholders in strong margins. This is a robust model, evidenced by strong client retention, and new business growth currently annualised at circa 1,000 clients per annum compared to a total portfolio of private clients of circa 7,000 throughout the UK.
The need and demand for advice is everywhere – from a government that is continually amending pension legislation, to the investment challenges of a slow growth global economy. The human race is wired to pursue progress; with progress comes change; and in the context of financial markets, with change comes the need for advice.
The Budget has provided yet more evidence of this at play. The introduction of a new ISA designed to encourage pension saving for the younger generation creates advice issues: how does this compare with a conventional pension arrangement? Particularly for basic-rate taxpayers this looks a better proposition, but does that mean that regular pension contributions should now be switched to this new initiative?
Flexi-access, the relatively new opportunity to draw down on ones pension scheme from age 55 without limit, is another example. However, for advisers both these are relatively straightforward in comparison to the decision whether or not to take a transfer from a defined benefit scheme for members close to retirement, now that there is no longer any tax on death on defined contribution schemes. The allure of a substantial pension inheritance has to be weighed so very carefully against the investment risks in funding pensions from a defined contribution scheme, requiring some not inconsiderable understanding of investment planning.
I believe I will have witnessed two fundamental structural changes to the retail financial services sector over the course of my forty-year career – one was at the start when the old insurance broking and stockbroking communities gave way to the IFA, the asset management houses and product providers. The second change is happening now. We are starting to see the emergence of businesses which meld advice, management, and product provision like ourselves, and determined efforts to build delivery of financial services online as the industry, in part at least, attempts to embrace the digital age. These shifts will provide very real challenges, requiring acumen and agility.