Is regulation creating the perfect storm in financial planning?

, 10 July 2018

When considering the future of financial planning, many believe the industry is facing a ‘perfect storm’. This is forcing changes to the way financial planners and their businesses operate. Increased regulation resulting from the Retail Distribution Review (RDR) and MIFID II, as well as uncertain market conditions, are seeing financial planners transform the way they work.

Introduced in 2012 to restore consumer confidence and promote fairness in retail investment, RDR has prompted greater transparency at every stage of the advice process. MIFID II, another daunting piece of legislation, has also given clients the right to know exactly what they are paying for.

For those of you who were able to see i4C’s head of product advisory board, Jon Rolfe, give his speech about the growing importance of cashflow modelling at this year’s Change the Game conferences, this may sound familiar.

With all of these macro factors at play, due to the advancement of technology and the abundance of information available, clients have inevitably become armchair investors and are questioning decisions more than ever before. Unfortunately, performance after fees has really been the only quantifiable measure that clients have to judge planners on.

However, it’s crucial planners don’t get into a constant battle to try and prove their investment performance to clients – it’s not beneficial for the client or the planner.

Alongside the changes to the industry and continued discussion around robo-advice, the tactics employed by financial planners have to change if they are to adapt to an age of greater transparency. Rather than inspiring consumer confidence, greater regulation has caused a lack of trust among clients towards the advice they are receiving.

Using cashflow modelling allows planners to work alongside clients transparently, creating trust and stronger relationships. Additionally, financial planners are able to mitigate against threats and transform the way they work to drive better compliance and profitability.

This is where i4C can help. A feature-rich and easy to use cashflow modelling application, clients can better understand the advice they are given. By allowing clients to contribute to the inputs, planners can ensure that they trust the outputs that are delivered.

We were delighted to announce our new partnership with Intelliflo at their Change the Game conferences in June. The partnership means users of Intelliflo will be able to benefit from full access to the i4C application through Intelliflo’s iO Store. Intelliflo clients will have the ability to adapt or build functionality which exactly matches their business requirements.