Greg

Since the publication of the FCA’s Thematic Review into Retirement Income, one topic has dominated our conversations with clients: do we need a dedicated Risk Tolerance assessment that focuses on decumulation?

Before asking ‘How do I meet the regulations?’, ask ‘Why do they even exist?’ Were you to track regulatory changes over time, you would see a clear direction of travel.

Advisers and wealth managers have a great opportunity to build deeper human relationships with clients in ways many haven’t yet embraced.

Not all increases in efficiency are created equal. The best are purposefully built around enhancing the investor experience, enriching adviser-client relationships, and automatically evidencing the process by which these are done.

There are many potential benefits to converting some investible assets into a guaranteed income for life, but how do you assess suitability for the combination of a guaranteed income and an investment portfolio?

ESMA recently issued additional MiFID II guidance, highlighting yet again the need for improvement in how the legislation has been applied to investor suitability assessments.

In giving financial advice, there’s a lot you must communicate to your clients. Doing this in a compliant way used to be relatively straightforward: write what the legislation told you to, send it, and put a copy in the right file. Under the FCA Consumer Duty, things are a bit different.

There’s something different about the FCA Consumer Duty – a quality we haven’t seen in previous directives from the Financial Conduct Authority. As systematic as the guidelines may be, there’s one theme running throughout and that is a thematic insistence on empathy.

Talking about emotions or personalities probably isn’t something your clients expect to do when they visit you for wealth advice. Yet investing is emotional – it’s about hope, and fear, just as much as it is about cold hard figures and in-depth planning.

The more behavioural finance is applied to financial advice, the more it’s misapplied by firms prioritising shortcuts over science and surface sheen over depth of understanding.