Ah, the LIBF has done it again. Another professional body representing the interests of, you guessed it, financial advisers, has taken the stage. This time, they’ve joined the ever-growing throng of industry lobbyists calling for the public to do their patriotic duty and shovel more money into pension companies. Of course, this inevitably generates a fresh flow of adviser fees for their membership and a hearty injection of cash into the economy.
Who benefits? The government, naturally, all primed and ready to look rosy for voters. It’s a convenient narrative. And while they're at it, they’ve thrown in a plea for more product sellers because, after all, we can't have enough of those. Why would we need people to understand finance when we can sell them more products instead?
What a stroke of luck for the LIBF! Just as the number of advisers is plummeting and fewer Gen Z folk are eyeing financial advice as a remotely appealing career, here comes this oh-so-timely proclamation. Almost as if the stars had aligned for the exact purpose of boosting adviser numbers—and, wouldn’t you know it, that just happens to mean more training courses (more income for the LIBF, what a coincidence!).
But here’s the bit that everyone’s conveniently ignoring: the idea that we could actually invest in human capital. You know, helping people earn more and work longer in fulfilling jobs that they want to stay in rather than this relentless retirement-or-bust narrative. But wait, no! You don’t need LIBF-qualified advisers to teach people how to remain healthier and economically productive for longer. That doesn’t boost pension pots, or drive up banker bonuses, or win any brownie points for MPs looking to clinch the next election, does it?
Let’s face it, financial advisers can only tap into financial capital—for a fee, obviously. They can't exactly skim a slice of human capital, can they? If people are earning more for longer, they've got more in their pockets. But more cash in their pockets doesn't exactly help prop up pension funds, does it? No, no—what we need is more product sellers. Who cares if we ignore the potential of keeping people healthier, wealthier, and more engaged in meaningful work? It’s the pension companies that need saving, after all!
But here’s the background.
John Somerville, LIBF’s very own crusader for closing the ‘advice gap,’ helpfully pointed out that the UK’s male life expectancy has shot up by nearly 20 years since the middle of the last century. Good news, right? Well, not so fast. The problem is that people are living longer, and only a select few have defined benefit pension schemes to comfortably fund all those extra years of retirement. Enter the advice gap: only 9% of the population has paid for financial advice in the past two years (read, seen a product seller). That’s despite 91% of people who have used it saying they found it useful. Quite the pickle, isn’t it? People need financial advice but either don’t think they need it or can’t afford it.
But LIBF has the solution! Let’s train more financial advisers. Never mind that three-quarters of IFAs plan to retire within the next decade and a good chunk of them are in the 55-64 age range. That’s a slight issue for the industry but nothing a few well-timed training initiatives can’t solve (and don’t forget who stands to profit from all that training—hint: it's not you).
The kicker? There’s no acknowledgement of the fact that, while technology and AI might take over some routine tasks, they can’t replace the human empathy and understanding that a good financial adviser brings. So, naturally, we need more advisers, right? And the cherry on top: Consumer Duty regulations, which demand firms to put customers’ needs first. In theory, this could mean access to free, independent financial advice. But that’s not quite as fun as pumping out products and keeping the cash flowing, is it?
Closing the gaps, they say
And what do we need to close these gaps? You guessed it: more training! Cue the New Talent Alliance, another cross-industry working group set up to bring more young blood into financial services. Great for the industry, perhaps. But while LIBF and friends are busy solving their adviser shortage, the rest of us might be wondering why no one's investing in human capital—helping people remain healthier, wealthier, and more productive for longer.
Because, let’s be honest, there’s no fee to be made from that, is there?
Comments