Now, finally, the designation “planner” will be formally recognised and it’ll be easier for professionals to transition to a fee-based model.
Broadening the base
Until now that has been restricted to high-net-worth, discerning clients and you have to build up your reputation, which takes time. The RDR is going to help thousands of planners – not just certified financial planners (CFP) – get into that space far quicker. The biggest change proposed by the RDR is the recommendation that providers facilitate the process of collecting fees by allowing clients to pay off the advice fee through the debit order deduction processes already in place for premiums. Up until now, there has been little focus on the quality of advice. A client would pay the same commission to someone with minimal qualifications and experience as a CFP. You wouldn’t expect to pay a bookkeeper the same as a chartered accountant, so why should this industry be different? The reputation of “planners” cannot help but be enhanced.
Nothing for free
The FAIS mandate or client letter of engagement is a good place to start for planners preparing clients for the transition. The planning and advice fees can be noted separately and signed off by the client. Being a certified financial planner will allow you to charge higher fees to make up for those cash-flow knocks your practice will take in a few years. Worth looking into.
Ridler is an independent financial adviser and coach and founder of Kerenga.com