I chaired a meeting of independent financial advisers at RIBA yesterday. The best thing about the morning was the half hour spent over lunch in the wonderful Rennie Mackintosh exhibition within RIBA’s beautiful HQ in Great Portland Street, a gem of modernism.
Mackintosh, in his internal spaces, his furniture and his grand buildings has a clear idea of what he was trying to do, and he executed brilliantly.
If only those of us within RIBA’s beautiful theatre had but a fraction of his vision!
Freedom is choice
The purpose of Freedom and Choice is to release people to make their own mistakes. The IFA community appear to going in the other direction, requiring people to follow their instructions and demanding they be employed before we can take any meaningful decision.
Bertrand Russell wrote
“Freedom in general may be defined as the absence of obstacles to the realisation of desires”
Mahatma Ghandi wrote
“Freedom is not worth having if it does not include the freedom to make mistakes”.
People need to have the freedom to take decisions without advice and the freedom to choose when they want advice.
I am sure that the Director General of the Association of Professional Advisers is right to say that the incidence of bad mistakes is higher where people do not do what they are told, but that is not the point.
We educate – we don’t advise
My firm does not advise people, it educates.
If you want to find out how, follow this presentation
We have clear goals, like Rennie Mackintosh. We aim to engage- educate and empower people to take good decisions.
For instance we think people should know what their state pension benefits are going to be and the options they have to top them up. We’d like them to be able to compare the value of investing in more state pension with the value of investing in private pensions. We’d like them to be able to make an informed choice on this- and we give them tools to do so.
For instance we’d like people to know both the cost and value of guarantees , so they can work out whether they want them – or whether they are prepared to do without them -with the extra risks attaching.
But we don’t want to tell people what is right for them, we want people to work this out for themselves.
A commercial model
This ethos “engage – educate and empower” informs all we do . It is so engrained in our culture that it has also become our motto- almost our brand. If someone asked me what First Actuarial do these days, I’d quote these three words.
And because we have this clear vision of what we do – and are able to articulate it – we are much in demand. Employers get it , Trustees get it and most importantly- members of pension schemes (members of staff) get it.
Which is why we get paid millions of pounds a year doing this work.
We are not advisers- we don’t deliver a definitive course of action, First Actuarial are financial educators, engaging, educating and empowering ordinary people to take decisions for themselves without the bias of any preferred “solution”.
Quite simply we are independent of product. That is because we are neither rewarded by product managers or owned by them. It’s not just that we don’t take commissions, we don’t buy into the continuum that says that people should be doing one thing rather another. We just want people to engage, learn and do things for themselves, confident that whether for better or worse, the decisions they took were informed ones.
I will be presenting the presentation I’ve included in this blog- tomorrow at 4.05 in the hall of the Institute and Faculty of Actuaries. Earlier tomorrow (May 21st), I will be the keynote speaker at the Money Marketing Retirement Income meeting in Walsall.
And if anyone reads this and finishes feeling I don’t value advice, you’re wrong. I value advice but I want to choose whether to take it or not