Midweek Digest for IFAs and Planners (17th Oct)

In this installment of Midweek Digest, we cut through the maze to give you a summary of the interesting stuff so far this week. Click on the title to read the article in full (opens new window). So here goes…                                                                                                                                                                                 


Do Advisers Really Need Paraplanners?

In this rather amusing article, Richard Bishop of Premier Practice asks what exactly paraplanners do and whether advisers/planners really need them! Interestingly our blog on Top 5 Reasons Not To Hire A Paraplanner was posted about the same time.  

They justify their existence by telling advisers it is stupid to spend so much time on administration and reports as this valuable time could be used to see clients. Personally, I see admin and reports as part of my job.’ Bishop wrote.

He urged paraplanners to ‘stop marketing themselves as report writers…,  add real value to client outcomes and adviser’s  bottom line.’

The article sparked a debate on Twitter and so far has attracted over 30 comments on MM!  Not comfortably with all these attention, Bishop (‏@RichardBishopUK) twitted I’m not writing about paraplanners anymore. Touchy folk them typists. O)’


Adviser Charging:It’s NOT Rocket Science, It’s Harder!

I doubt any adviser expect AC to be as simple as getting a signed authority from client saying “pay my IFA £1,000 please” or “pay my IFA 0.5 per cent a year of my investment.” But no one expect it to be rocket science either!

 If the discussion among some leading advisers on Twitter is anything to go by, it looks like AC is going to be a harder nut to crack than previously thought and platforms/providers are not nearly half as ready as they claim to be.

Writing in Fundweb, Tim Newman, MD of Sense Network say ‘Misinformation abounds and confusion reigns’ among platforms, given the unbelievable range of approaches and requirements being adopted.

 Newman calls for ‘a dose of common sense…, a little more facilitating and a little less dictating.


Investor Behaviour: Stupid Is Perfectly Rational

It’s every adviser’s nightmare – a clients who expects you to ‘beat the market, wants to cash-in their investment when the market is going down and reinvest when it’s going up and they think Neil Woodford is a god.’  This article is a summary of a presentation by Prof. Statman, a behavioural finance expert an event organised by CFA Society of the UK.

Statman says adviser should recognise investors are not “rational” — the computer-like utility-maximizing machines that traditional economic theory assumes us to be — but “normal.” As normal investors, we are prone to cognitive errors. We may lack self-control, wrongly frame issues, only seek evidence that proves our ideas, have excessive loss aversion, divide our money into mental accounts, be overconfident in our abilities, or thoughtlessly follow others.

Using a combination of stories, academic research and amusing video clips, Statman provided useful insight on how adviser can save investors from themselves, using what he referred to as the science of investing.  ‘Good investment professional are like good physicians’ he said,  they take care of their clients — not only of their wealth but also of their well being!

You can watch the full presentation here






Abraham Okusanya
Abraham is the founder of FinalytiQ, a research consultancy for platforms, asset managers, and advisory firms. Recognised as one of the country’s leading experts in retirement income, platforms and investment propositions, Abraham has authored several papers on these subjects and delivered talks to the Personal Finance Society, The FCA and several conferences across the country.

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