I am a chartered accountant by trade but haven’t been in practice for years. I do have an understanding of the UK tax system.
I initially thought of going down the regulated route, but I am considering fixed-fee advice only, which might be more suitable for me. I only want a hand full of clients as I have another business which provides for me. I’m looking at financial planning just because I enjoy it.
My main worry, and I’m sure it’s not the first time you’ve been asked this, but why would anyone choose non-regulated advice over regulated?
Financial planning is not an FCA-regulated activity; FCA Handbook PERG 8.26 refers.
Selling investment products is an FCA-regulated activity. This activity must be policed as it is about handling money. Investment sellers, I will refer to as financial advisers.
What I am about to say is a generality. It is factual and not intended to offend. Those conditioned in the common opinion are easily offended by what I am about to say. I apologise. But it must be said to answer your question.
Most of the time, financial planning is delivered in the market as a very successful way to sell investments. Selling investments is easy and very profitable for the adviser. The sellers set up a centralised investment proposition to tap into for fees. They learn a bit of banter about how difficult it is to invest. It doesn’t take many clients before the adviser earns more than their client. The benefits are stacked heavily in the adviser’s favour, which is why it is heavily regulated.
Financial planning has an often overlooked, more practical purpose. It can be used to put in place the financial architecture to support the client’s favourite future. A path to a life they love. This plan requires asset strategies and accounting skills if you like. It begins with values and inner awareness to prevent us from being puppets.
“Man is pushed by drives but pulled by values.” – Victor Frankyl.
Next, we do an asset audit (tangibles and intangibles), from which we can leverage entrepreneurial opportunities to generate sustainable livelihoods and build wealth. Then we identify the future the client loves. Put together a project plan. Do the financials and provide the pathway.
The regulated financial adviser helps their client save wealth they have already made. The non-regulated financial planner helps people create wealth and experience personal growth to a better future.
The financial adviser is looking for delegators who are willing to hand over their money with few questions.
The financial planner is looking for those who wish to learn more about their finances. Advice-only financial planners increase their clients’ financial activation levels, allowing them to control their own finances for better outcomes. We do this with end-user financial planning tools and extensive financial education libraries.
If the client wants to save money they’ve already made, our initial assumption is they can do this themselves with the right support in the commoditised market. We are mainly there to lend our expertise in times of change or stress.
Financial planners are not unregulated. We are traders regulated by the Competition and Markets Authority, and our clients are protected under consumer law.
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