IFAs and actuaries – as easy as “A Cap B”.


a rigorous analyst?


Emotional intelligence?

For half of the 30 years I’ve been advising people, I was paid by private individuals to help them take difficult financial decisions.

For the other half, I’ve been paid by employers to help their staff take difficult decisions.

This symmetry was mirrored in my working day yesterday. I spent the morning Chairing and delivering the Keynote address to a conference of IFAs in Walsall. I spent the afternoon preparing and delivering the final address to an actuarial conference in London.

Culturally, intellectually and geographically, the two group are miles apart, but in talking with these two groups have more to learn from each other than could be explained by me either from a podium or on this blog.

My message to the actuaries was that they needed to get back in touch with the people for whom they devised their pension strategies, connect with the way people think outside of Staple Inn (the home of their Institute and Faculty).

My message to the IFAs was that they need to get better organised and present themselves in a more ordered way to allow them to practice their work more effectively.

In essence I found myself asking actuaries to understand IFAs and vice versa.

It’s all very well me saying this, I am neither actuary nor IFA –  but I work for a firm that to some extent bridges the divide -we offer guidance in the workplace and I build relationships with IFAs who want to advise the members of the pension schemes we manage.

I don’t know any forum that allows these groups to meet as equals. I suspect that neither group would acknowledge the other as professionally equal but that surely is wrong.

The emotional intelligence among IFAs is matched by the analytical intelligence of actuaries and the point of my speech (and those of Dr Ian Clacher and Marcus Hurd who spoke before me at the IfOA) was that we cannot provide solutions to ordinary people without engaging with and learning about their needs.

The analytical rigour with which actuaries use data – is too little evident among IFAs. Chairing eight sessions yesterday morning over 5 hours, I could see information going in one ear and coming out of mouths at the coffee and lunch breaks “unprocessed”.

Some kind of synthesis which brings the skill-sets of each group together would be good. But I don’t see this happening too soon.

There is a lingering resentment of actuaries among advisers that goes back to the days of the pension mis-selling crisis and perhaps to the seventies (where advisers were told what to do by the actuaries of life companies).

And too many actuaries hold in IFAs in contempt for their lack of intellectual rigour and for “shady business practices” – a phrase used in my presence yesterday.

Picking up on this “shady business practice” in question, it referred to a criticism of IFAs that they create products that require the ongoing attention of IFAs to work – specifically Flex-Access Drawdown and FLUMPS. As I pointed out to those throwing rocks, this is precisely what actuaries have done with Liability Driven Investment.

In a world where everything from Robo-Advice to Self-Service Actuarial valuations can be accessed on the web, the value of individuals – those in the rooms in Walsall and Holborn-is being called into question. Whether the advice comes from actuary or adviser, it is coming from a human being.

Staring out at the serried ranks of conference goers in the two venues, I realised this was what brought them together- both in their individual groups and in a common purpose. We are all struggling to be relevant , to add value, to compete with the machines we create and operate.

A couple of years ago, I tried to advertise First Actuarial , using an advertisement that I thought might bridge the gap.


It didn’t go down well with my colleagues though it was extremely well received by financial advisers who urged me to do more in this vein.

There is a common ground between actuaries and advisers but both are going to have to get out of their current comfort zones to explore it.

Which is why I’ll look back on yesterday as defining what I’ve been about for 30+ years. Helping human beings take decisions needs human beings. People need guidance and advice and ultimately comes from a combination of the intellectual and emotional skills I saw yesterday.

A                             B

Whales and Fish

This charming Venn Diagram shows that whales and fish, co-exist and share things – most particularly water. I would argue that actuaries and IFAs share things – most particularly the desire to help people make good financial decisions.

I’d like to see a little more recognition of A cap B.

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
This entry was posted in actuaries, advice gap and tagged , , , , , , , , , , , , , , , , , . Bookmark the permalink.

Leave a Reply