Weekend Digest for IFAs, Financial Planners & Paraplanners (15th &16th Dec)


Congrats to all those who passed their CII exams this week and for those who didn’t  keep going!  It’s been an exciting week for us at FinalytiQ HQ as we rejoice over our CII result, yours sincerely made a debut in NMA and our Adviser Survey on Paraplanning Post RDR attracted over 100 responses so far, all of which we are very pleased about.  Thanks to all those who took part in the survey and if you are yet to, please do so here (and encourage other to as well. Shares and re-tweets are appreciated.) Go NOW! We expect the results to be out in January and we’ll no doubt share with you.

Here’s a summary of this week’s interesting articles. Click on the title to read the full article(opens new window).


Video: The Science of Persuasion

Many thanks to Alan Smith of Capital Asset Management  for sharing this short video on Twitter.  Based on the book Influence: The Psychology of Persuasion by Robert Cialdini, the video highlights the factors  influencing how and why we say yes to the request of others.

While we all like to think that people consider all the possibilities when making a decision, research over 60 years shows that we use mental shortcuts to making decisions. These shortcuts include reciprocity, scarcity, authority, consistency, liking and consensus.  Using these shortcuts ethically  no doubt will come handy for advisers in selling their proposition to clients.


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The Changing Face of Investment Advice (And Non-Advice)

In this article in Fundweb, Platforum’s Holly Mackay presents her assessment of UK retail investment market. According to Mackay, of the 14.1m UK retail investors in the UK, nearly 4m are entirely self-directed compared to 2.4m who  are entirely advised. The rest dip in and out of advice – they are ‘part-timers’.

She points out that a big theme to expect in 2013 is firms adopting a multi-channel approach, where they offer an execution-only service, alongside their traditional ‘ongoing’ advice.

While we are bound to see more and more execution-only offerings from advisory firms who want to target the 8m odd RDR-orphaned clients, the key in to success is differentiation in what is already a crowded marketplace.


The Effect of Gender Rule’s On Pensions Still Unclear

This article in NMA by Nigel Orange of Canada Life is about the lack of clarity with regards to how the EU gender rule coming into effect on 21 Dec 2012 will affect pensions.

Orange points out the confusion in the way the rules apply in particular to workplace pension. For instance, while workplace pensions are not subject to the rules, if member purchases an annuity  using funds held in a work-based pension scheme without the involvement of the employer or the scheme, the purchase would fall under the scope of the directive and therefore would be subject to gender-neutral pricing. This creates a situation where there may be an incentive for female members of an occupational scheme to use the open market option but a disincentive for male members.

The rules also apply to capped drawdown following the HMRC’s revised  guidance on the use of GAD tables allowing the maximum drawdown pension for both men and women aged 23 and over (known as table 1) should be calculated using the higher male table 1 rates from 21 December 2012. However, exiting female drawdown clients will not feel the impact of this change until their next review date after 21 Dec., 2012. Overall, these change was intended to be a temporary solution to prevent the potentially negative impact of the ECJ ruling on men’s drawdown income while minimising higher costs for providers until the outlook is clearer.


From Legacy to Adviser Charging

This article in FTAdviser reports one IFA’s approach to adviser charging for existing clients in order to avoid cashflow problems post RDR.

Adrain Murphy of Murphy Financial noted that transitioning existing clients over to adviser charging post-RDR is a ‘huge issue’ that result may cause severe cashflow problems for firm and will be the main driver for advisers leaving the market.

Mr Murphy said: “We are moving every single client onto adviser charging, either at their review because nothing has happened to trigger that stopping in the mean time or if there is a trigger event. We will get them to just sign a client agreement and then it is done.”

I doubt it’s that simple but then again, it’s not rocket science or is it?


I hope you have enjoyed this and hopefully it’ll make you job a little easier! As paraplanners, that’s what we do! As usual, thought and comments are welcome. Enjoy your weekend!









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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