Just recently we were asked the question, which type of advice firm is likely to be the most successful in the here and now? The ‘specialist’ or the ‘generalist’?
It’s a very difficult one to answer because there is no right answer but it’s one that I’m sure weighs heavy on the minds of most advisory firm owners, or those advisers who would like to go it alone.
It feels a little like Consumer Duty is trying – perhaps without even truly knowing it is – to push advisers down the more ‘generalist’ route, and from the regulator’s point of view, that might seem understandable.
After all, of all the ‘financial advisers’ consumers are likely to see, a mortgage adviser seems the most accessible, and is the window to that world, but how realistic is it that the client will also see a protection/GI/wealth/IFA/later life specialist? Not forgetting what they might need in terms of conveyancing or wider legal advice?
Hence, perhaps, why there is such a focus on mortgage advisers ensuring as many bases are covered.
There seems to be a fear factor that advice is a once every few years, mortgage-focused engagement; hence, why we have Consumer Duty seemingly layering on more responsibilities, and avenues to explore, for advisers.
As mentioned, this might suggest the days of the ‘specialist’ adviser are over. We’ve read a number of commentators come to this conclusion, arguing that being a ‘generalist’ actually opens up more doors for advisers, greater levels of income, plus of course ensures the client is looked after with all their needs.
But, our view is somewhat different, because – when it comes to meeting Consumer Duty requirements – there seems to us a very big difference between advice and signposting which should certainly allow the specialists to remain, if they wish, laser-focused on their specialism, while still sending clients in the right direction if they have other wants/needs that the specialist is not willing or able to fulfil.
Of course, here is where a strong network proposition can come into its own, and in our view, will fulfil a much-needed, but not necessarily readily available in the network space, option, namely accepting what the AR firm and/or adviser want to do, marrying this up with their regulatory responsibilities, and allowing them to do what they want and ensuring their ongoing compliance.
In essence, we think this is a ‘grown ups’ approach – it does not talk down to firms or advisers, it does not make them move into areas they are not comfortable with, it allows them to keep on being specialists if they wish, but it also gives them the opportunity to highlight where the client might want to go if a need or problem is determined, and it is answered with a solution the individual or firm can’t/doesn’t wish to offer.
From our perspective this is a big difference in proposition compared to, for example, some of the medium-sized or larger networks which want/need to have a uniformity of offering because they can’t allow their firms or advisers to actually do what they would like to do, because it’s too difficult for them to risk-manage and it’s too resource/investment/work-intensive to look after firms in this way.
Instead of this catch-all approach, we offer a flexible and tailored one. We have a firm that does a significant amount of business with high net-worth individuals where the mortgage amounts are in the millions. They offer a concierge approach to their clients, where they – understandably – fill out the paperwork, take everything upon themselves, and ensure the client is fully looked after. These clients are not going online and filling out a form to start the process.
However, many client interactions and relationships do start in such a way. In fact, outside of this high-end/large loan niche, we would estimate 90% do, and therefore we have clients willing to fill out forms, etc, online. It’s just that the firm mentioned above have a different clientele where this is not the case, and so therefore their approach to their clients differs.
We can accommodate both types of firms, plus we can accommodate later life specialists who want to continue working almost exclusively in this area, or those who deal with portfolio landlords mostly in the limited company space, or those who will see all manner of clients, often with complex income needs.
They can continue to carry out this work as specialists, and where they do find clients with other needs, we also have a range of in-house or external partners that these firms and their advisers can introduce to, or as mentioned, if they want to do the work themselves they are able to go via these routes.
If you want to remain, or morph into, a specialist, then having a network that smooths the path will undoubtedly help, but not all networks can/will do this because the risk for them is too great.
Therefore, work with those that recognise specialists are still required, and much-needed in our sector, and look for those that are going to nurture your specialism and provide options for everything else.
Rory Joseph and Sebastian Murphy are group directors at JLM Mortgage Services, the mortgage and protection network
