Rethinking Financial Advice: Beyond Selling Products

Introduction: In light of the Financial Conduct Authority’s (FCA) recent proposals on reforming the advice boundary, it’s imperative to examine a critical, often overlooked aspect of financial planning. The prevailing industry approach leans heavily towards managing assets and selling financial products. However, what if there’s a more holistic, consumer-focused way to assist people with their financial needs?

The Current Industry Focus: The financial services industry predominantly orbits around accumulating assets under management. This approach often leads to prioritising product sales over addressing the actual financial needs of individuals. While the FCA’s proposals aim to simplify advice and broaden access, they still hover within a framework that doesn’t fully address the core issue: the majority of consumers require guidance in managing cash flow and generating income, rather than just managing existing wealth.

The Academy’s Perspective: At the Academy of Life Planning, we advocate a different approach. We believe financial planning and coaching should be distinct from product selling. Our mission is to democratise and decentralise financial planning, focusing on transparency, integrity, and genuinely addressing the consumer’s needs. This philosophy is embedded in our services, ‘Planning My Life’ and ‘Financial Life Coach’, which cater to different consumer segments without the ulterior motive of product intermediation.

Challenging the Status Quo: The industry’s relentless focus on selling investment products overlooks a fundamental issue: a significant portion of the population struggles not with where to invest their money, but with having adequate money to manage in the first place. The industry, at times, appears complicit with this product-centric approach, possibly influenced by its ties with product providers.

The Need for Non-Intermediating Financial Planners: What the population needs is not another investment product but effective strategies for managing cash flow and achieving financial security. This is where non-intermediating financial planners play a crucial role. They focus on helping individuals understand their financial situations, set realistic goals, and devise plans to achieve them, without the bias of product selling.

Conclusion: While the FCA’s initiative to redefine advice boundaries is a step forward, it’s crucial for the industry to pivot towards a more inclusive approach. Financial advice should be about empowering individuals with the knowledge and tools to manage their finances effectively, irrespective of their wealth status. It’s time to shift the paradigm from selling products to nurturing financial well-being.