My route into financial advice was unusual, to say the least. I had a fondness for numbers from an early age, but it was somehow decided this passion should be channelled into my family’s fruit-and-veg firm.
As things turned out, the Goodwins failed to radically disrupt the world of fresh produce. As a result, by then in my mid-20s, I finally headed off to university and earned a degree in actuarial mathematics and statistics.
I decided financial services would be a good fit after graduation. So it proved. I found my calling as an adviser and eventually ended up establishing my own business, which recently celebrated its 15th anniversary.
Interestingly, at much the same time that Truly Independent was really gathering momentum, many advisers were heading for the hills. This was a direct corollary of the Retail Distribution Review (RDR).
As we all know, the fundamental goal of the RDR was to improve the provision of advice. But an unintended consequence was to persuade a significant number of advisers to abandon the industry.
Most jumped ship because they didn’t relish the prospect of higher professional standards. Some perhaps knew they would fall short of more stringent requirements, while others doubtless felt they were too far into their careers to start sitting exams again.
It’s no great stretch to suggest the threat of learning new skills gave rise to the advice gap, a problem that’s still with us today. In large part thanks to this unhappy turn of events, many advisers are sceptical of the idea of “continuing professional development” (CPD).
This does no-one any favours. It’s to the detriment of advisers and clients alike. The fact is that nobody stays ahead of the curve by standing still, which is why CPD should be seen as vital to long-term effectiveness and success.
I guess my own aforementioned career path imbued me with this view. After all, the words of wisdom you’re absorbing now come from a man who can deliver advice, run a company and explain the differences between a clementine and a tangerine. Talk about a polymath!
So how can we encourage CPD without sending another generation or two of advisers scurrying for cover? A useful first step is to acknowledge this isn’t just a matter for regulators.
Whatever we might think of it, the regulatory community tells us what to do. Not all of its pronouncements fill our hearts with joy, but we ought to concede there are occasions when the latest brainwave turns out to be quite handy – and any sincere effort to enhance outcomes for advisers, clients and other stakeholders surely fits that bill.
But here’s the rub: I would be more than a little suspicious of any adviser business that engages in CPD only when the regulator issues a command from on high. This might be interpreted as evidence of a “wait and see” attitude, but it’s more likely a sign of entrenched inertia.
In my view, a company that needs some sort of compulsory edict to spark it into action isn’t especially fussed about improving. It just wants a quiet life. It would like to be left alone and allowed to carry on doing the same old things it has always done. It’s never going to be a pacesetter.
In our industry, as in any other, the outfits most likely to be ahead of the curve are those that embrace CPD as a norm. These forward-looking trailblazers place upskilling at the heart of their organisational culture. They practise it from the top down and the bottom up. They consider it implicit, not something that has to be imposed from above.
They also strive to get better in areas that actually count for something. They don’t encourage their employees to spend an afternoon paintballing or basket-weaving, chalk it up as “CPD” on their timesheets and then forget all about it. They try to cultivate genuinely relevant skills.
Where should advisers be focusing their upskilling efforts today? Technology probably provides the most fertile ground for adding strings to our bows. No-one disputes that tech is transforming what we do, so it would be crazy not to get to grips with it.
Less obviously, there’s always scope for advisers to boost their soft skills. These might include adaptability, collaboration, time management and even critical thinking.
Of course, our friends at the Financial Conduct Authority are pretty unlikely to demand we all up our game in these respects. But that doesn’t mean we shouldn’t bother.
An adviser business that treats CPD as an obligation has a good chance of standing apart in a competitive marketplace. It might even become the apple of a client’s eye. By contrast, one that treats CPD as an inconvenience is flirting with a very large banana skin. And don’t forget that I say all this as a bona fide fruit-and-veg expert!
Andrew Goodwin is co-founder and CEO of Truly Independent and the author of ‘The Happy Financial Adviser’.
