1. The Spectrum IFA Group
Amsterdam Luxembourg Lausanne Paris Cote d’Azur
Barcelona Madrid Costa Blanca Costa del Sol Rome
With Care, You Prosper

2. Michael Lodhi
CEO The Spectrum IFA Group
Board Member of FECIF
Fédération Européenne des Conseils et
Intermédiaires Financiers
Vice Chairman FEIFA
Federation of European Independent
Financial Advisers

3. The Future of IFAS
Why IFAs are now more important
than ever for the European
Consumer

4. What is an IFA?
• Independent – wide choice of product
• Financial Adviser
• Investment Adviser
• Financial Planner
• Insurance Broker
• Distributor of Financial Products
• SME (Small or Medium Enterprise)

5. New EU & National Regulation
• Does the European Commission understand
the impact of more regulation on SMEs?
• The cost of regulation and of changes to
business models
• The time spent
• Do National Politicians?
• Do European Politicians?

6. New EU & National Regulation
• Do the Commission & Politicians understand
the importance of European Citizens investing
for retirement?
• Any reduction in advice and services will
impact EU member state’s budgets.
• Citizens will need more financial support in
retirement from those budgets.
• Citizens living longer = costing more!

7. The Consumer
• Are they proactive?
– Retirement Planning
• DIY investing?
– 1990’s to March 2000 – Day traders
• Education?
– What next? DIY Doctors?

8. UK Financial Services Authority (FSA)
study of UK Bank advice (mystery shopper)
• Complex risk profiling resulting in poor risk
assessments and client understanding
• Failure to consider client needs and
circumstances – poor quality fact finding
• Failure to consider client’s investment
timeframe
* Source – Seven Deadly Sins of Bank Advice

9. UK Financial Services Authority (FSA)
study of Bank advice (mystery shopper)
• Failure to give clients correct information
(unacceptable in 42% of cases)
• Inappropriate use of Sales Aids
• Inappropriate use of Financial Incentives
for sales staff
• Weakness in internal controls

10. Result of UK RDR – Commission Ban
• Banks – Many closing advisory service
Increased Training Costs - Qualifications
Increased Regulatory Costs & Fines
Increased Internal Compliance Costs
• Consumers
Will the majority pay for advice? No
Will they get advice? No
Will they rely on the state for Pensions? Yes
Can the state afford to pay? NO

11. Initial costs for an IFA SME
• Cost of qualifications and continuous
professional development
• Cost of Licensing and Regulation
• Cost of Professional Indemnity Insurance
• Market and Product research
• Cost of Client Acquisition
• Who Pays?

12. Quality IFAs & Financial Planners
• Know and Understand clients
• Understand Client’s goals and objectives
• Understand Client’s attitude to risk
• Truly match Client’s needs to solution(s)
• Explain all costs and penalties in detail
• Involve clients in the decision
• See clients regularly to review

13. Can fee based advice work?
• Consultation and Planning Report, should
the client pay? Why not a free “test drive”?
• Initial Fees will restrict consumer choice
• Plan implementation and transactions
• On-going monitoring of plans
• Personal After Sales Service
• Can an IFA make a living?

14. The Future
• Banks withdrawing from advice market
– Will “product sell” without advice
• Product providers looking outside EU
– Withdrawing due to lack of distribution
– Or “product sell”
• Few new IFAs or start up businesses
• Citizens need IFAs for proactivity & choice

15. The Future
• Independent advice & consumer choice
– Dying out
• IFAs & Financial Services SMEs
– A dying breed
• Regulators & Legislators
– Nothing to regulate
• Result
– No growth and more budgetary stress

16. The Spectrum IFA Group
Amsterdam Luxembourg Lausanne Paris Cote d’Azur
Barcelona Madrid Costa Blanca Costa del Sol Rome
With Care, You Prosper