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This section of our website aims to cover some of the news and views that affect financial planning and wealth management.
Aurora Group firms fly the service standard!
Investor in Customers (IIC) the service standard experts have just presented IIC Awards to two founding members of Aurora Group, the City based boutique wealth management forum - Investment Quorum (IQ) and Capital Asset Management (CAM).
IIC use a star rating system for the Investor in Customers Award of 1/2/3 stars and both IQ and CAM have comfortably achieved the 3 star standard (IQ for an unprecedented third time). Charlie Williams, director IIC commented: “The Aurora Group member firms are united in their belief in the importance of long term relationships with clients based on understanding their personal desires and aspirations. It is therefore gratifying to have been able to carry out these two assessments and evidence the success achieved by Lee at IQ and Alan at CAM in delivering against these challenging values. Both firms are in the top ten of companies we have assessed, across all business sectors.”
He added: “Whilst there are differences between the two, around the margins, both have achieved very high client loyalty scores which from the comments made by clients are deeply rooted in the quality of service provided by Lee and Alan.”
Both Lee and Alan were delighted with the detailed feedback from their assessments as well as the three star awards. Many client respondents were happy for their responses to be shared with the firm concerned. As Lee said, “we are now in a position to have meaningful discussions with many of our clients about specific aspects of our service and this will enable us to fine tune the service we provide, still further.”
Alan agreed and also saw real benefits for staff. “My team are buzzing about the award and it’s been great for them to see their efforts recognised in this way by the people who matter, our clients. It’s been a great experience.”
Download PDF of Press Release
Retail Distribution Review
The RDR began in 2006, with the aims of providing greater clarity to consumers on products and services, introducing increased standards of professionalism and creating a framework where customers are treated fairly.
The interim feedback paper from the FSA, published in April 2008, wanted to put clear water between the 'sales' culture prevalent in the industry, and a more 'advice' based culture. The most recent paper from the FSA, however, has now backed away from this position and there still remains significant overlap, and therefore the ability for confusion, in what a customer will receive. The RDR has had to be diluted, simply because it would affect the banks significantly at a time when they are already suffering. This means that consumers will not have the clarity they need to make informed decisions
We feel this is a major opportunity missed, and again demonstrates the power of the main financial institutions, such as the high street banks, which have a vested interest in blurring this distinction. While understanding the reasons for this dilution, and understanding that for many people the banks offering means they at least get some element of financial advice, Aurora Group feels that there are also clients who would benefit significantly from boutique wealth management services, and that the private banks and insurance companies are not the right place to obtain it.
The move to a more professional approach by 2012, driven by high levels of demonstrable skill and knowledge, we fully support. It will have the effect, however, of reducing the numbers of IFAs significantly, a recent estimate suggesting the numbers could fall from 26,000 in the UK to 10,000, a staggering 60% reduction. The average age of IFAs currently sits at c.58, and clearly many feel that the prospect of having to sit and pass further professional exams is something they are not prepared to do. The raising of standards is imperative to the increased standing of financial advisers and planners in the UK, but this loss of numbers, which will include some very good advisers currently practicing, will create a hole for consumers that will take many years to fill.
Whither the Banks?
The current level of dissatisfaction with the banks, not simply as providers of deposits and loans, but as financial planning and wealth management providers, is at an all time high. This is because these institutions, under the banner of 'advice', are merely sales engines that promote products to clients, often with high margins of commissions to the institution.
A recent study by MDRC (Strategy Brief 2009), a leading adviser on wealth management and private banking business strategy, highlighted that there is significant disillusion in the High Net Worth market with the provision and delivery of financial services by the private banking sector. "Although some UK wealth managers are embracing change... too many wealth management businesses are pursuing business models that were developed a decade ago".
Aurora group recognizes that many clients, while being thoroughly dissatisfied with their banks, often involving well known, so-called 'up-market' brands, are unsure of where to find viable alternatives. Aurora group's promotion of true wealth management, focused on the individual, is aimed at providing a solution to this problem.
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