The Advice Gap has been much discussed in the world of financial services and advice in recent months. It boils down to the fact that if you don’t already have money to invest, most financial advisers can’t or won’t afford to take you on as a client; or you won’t be able to afford their fees. In fact, you may not be a good prospective client or have enough money until you’re starting to think about retirement, by which time you may not, paradoxically, be able to afford to retire. The current wisdom is that technology will be the answer, delivering cheap guidance-not-advice (ie no-one has to carry the can if it goes wrong). Old hacks however, will say that commission used to be the answer, as it meant there was some reward for helping the young or less wealthy set up a pension, life assurance or savings. Those plans and policies might not have been such good value for money (although only, usually, if you stopped paying early) but at least they had them. And isn’t something better than nothing?
“Letter of authority: Why now is the right time for change”
This may sound like a non-issue from outside the world-of-financial-advice bubble. It is the bain, however, of the daily working lives of many of us, particularly of those paid by we advisers to do the dirty work of dealing with the many providers with whom we have to work.
