Keith Richards has led the Personal Finance Society (PFS) for the past eight years, during which he has repeatedly faced the end of all the important questions related to financial advice you can think of.
His departure from the specialized agency this month ends one of the most sought after and eloquent voices of any advisory expert.
But that might have been a completely different story, as Richards didn’t go looking for a role for PFS. I came to look for him.
With a commercial background and nine years as Group Distribution Development Director at Tenet, accepting the role of PFS CEO was not an obvious career move for Richards.
“If they didn’t get close to me, it wasn’t the role I would have applied for because PFS wasn’t on my list of potential employers,” he admits.
“At Tenet, we were involved in helping independent financial advisors work with MPs to increase regulatory costs.
“That experience made me think that I had the opportunity to engage policy makers as a specialized agency rather than as a network.”
Since then, his PFS journey has navigated the most difficult elements, from retail distribution reviews (RDRs) to Brexit to the storm of defined benefit (DB) transfers. Some people may have jumped on a boat on a course where it’s very difficult to chart, but Richards isn’t.
That buoyant temperament is encountered in this one-hour interview. Money marketingAlongside the inherent optimism.
Richards’ sense that the profession tends to focus negatively and ignore the big picture has been with him since he took command at PFS in 2013.
“It was just after the RDR and we were working on the reality that PFS could drop to 18,000 members,” he says.
“It was in line with the expectations of many experts at the time. They believed that this massive contraction would occur because people didn’t pay for advice.
“I was probably one of the few who didn’t think the sector was at such risk because I felt more optimistic, but I still do.”
This optimism is rooted in the way Richards learned to distinguish between perception and reality. That meant focusing strictly on what he could and couldn’t influence.
He states: “I’ve always taken a half-water approach to life based on what I can achieve, not what I can’t achieve. This approach can be a challenge for the sector as a whole.
“In the early days, I had to grab the reins and drive what I saw as evolution, which, in combination with the modernization of PFS, was the transition from industry to profession.
“I found it helping people understand the difference between trade associations and professional associations.”
This is one of Richards’ major missions during his tenure. He claims that, like trade associations, there are trade associations to represent their members. Professional agencies, on the other hand, represent the best interests of our members’ clients and the general public.
Richards states that a key element in the history of the Chartered Insurance Institute (CII) is its edict. It is based on increasing public trust and trust in our members. When CII was founded in 1912, it required well-qualified individuals to gain greater trust in the advice given to their customers.
Unfortunately, qualifications are not enough to change the unfair perception that some consumers have about advisors.
“With the passage of time as a professional institution, it has to be more than that, about the cultural behavior that determines whether we are trusted as a profession,” says Richards.
“Frankly, it was a challenge because many people don’t understand the difference between trade associations and specialized agencies.
“The names of the same things sound different, but they are fundamentally different.”
He adds: “I was fortunate to have Her Majesty as a backer on my business card. This will change the conversation with the government and regulators.
“I used it as a lever to make sure the PFS had a chair at the table and heard its voice.”
The voice has the task of not only speaking to the advisor, but also challenging the advisor. In particular, there is a biased perception of the advisors themselves and organizations such as the Financial Ombudsman Services (FOS) and the Financial Conduct Authority (FCA).
“I can’t tell you how many times the adviser has expressed fear at the end of a bad decision. But when I ask the adviser how many times the FOS has endorsed a complaint against them, the answer is very small. “He says.
“When you ask,’Where is the evidence that FOS is giving you?’ Less than half of 1% of FOS cases are related to IFA, and more than 65% are rejected by the ombudsman. I have.
“This is the case when you make your perception your reality.”
According to Richards, the lack of perspective can make the advice profession its own worst enemy.
The old stereotypes of rogue cowboy IFAs trying to rob vulnerable customers still stir the imagination. Stories can unfold that suggest that there are far more misunderstandings and inadequate advice than they really are.
This is a plausible interpretation of the story about DB transfers, and a glorious example is the scandal of the UK steel pension system.
“As a sector, we sometimes rushed to talk about a single DB advisor who gave poor advice, without talking about the entire market,” he says.
“Fortunately, [IFA and ‘Port Talbot pension paramedic’] Al Rush will come and give you free advice that was a good balance. But you don’t need a lot of advisors to give poor advice to defile everyone. “
Some financial advisers contacted Richards and said they regret having advised a longtime customer who happened to be a steel worker.
“They were contaminated, so their professional liability [PI] Insurance went through the roof. It shows that you can have an intact 30-year record, yet your overall reputation is now being questioned, “he says.
The biggest problem
Richards acknowledges that regulators have introduced rules to solve the worst problems, not the average ones.
The two biggest issues for advisors are the increased cost of regulation and the lack of proper PI. Both require legislative changes to address this “one-off”, he says.
For DB transfers, the FCA must prove that it “did not sleep while driving” and must not report that it has taken action against a particular market. It is disproportionate in itself and can undermine credibility.
Richards said: “We worked with the FCA to try to drive action through action, but it was responsible for dealing with the unintended consequences of losing trust in the wider sector.
“We can change that, but only if we can prove that we are a credible profession.”
Despite the perception that regulators are always on their own path, Richards believes it is increasingly being challenged by politicians. In fact, he sees the challenge as a better opportunity and extends his ideas to financial advisers. The headline message is that the demand for guidance and advice has not diminished.
“The fact that regulators themselves say they can take different approaches to simplification as they move out of the EU is an interesting driving force,” he says.
“Do people have enough money to retire? The FCA has been challenged by the government to make UK financial services a benchmark that others should follow. Take a closer look. , I have a chance. All I have to do is look at the evidence. “
He is one of the lowest savings rates in the developed world, and the FCA’s show that 28 million consumers are suffering from financial vulnerabilities due to Covid-19, which the government is concerned about financial fraud. Quoted from Financial Lives survey figures.
When it comes to pandemics, Richards is optimistic about how long the transition to work culture will last. He foresaw a form of hybrid work, observing the onset of some screen fatigue. He never misses a long time without a break between work and family life formed by office commuting.
“One of the biggest stresses is having meetings all day long because I have an office in Hong Kong,” he says.
“They are eight hours away and I get up at 6am to do some of the Far East meetings and then to the UK until the end of the day. When we were traveling, it was us. I broke my day.
“It will be interesting to see the blend we move forward, as digital cannot provide physical experiences and interactions.”
Richards has no news about his next role, but says he will continue to chair the PFS’s Financial Vulnerability Task Force.
He sees the work of the professional institution as the greatest achievement, not what the professional institution did within itself, but to assist the advisor through continuous professional development.
The area left for his successor is the unresolved work on the financial advice market review sidetracked by Brexit. Richards is advocating the government to review it again.
Evolution, not revolution
Does he have any advice for the next PFS leader on how to navigate the potentially more volatile waters?
He replies: We have created a great team. There is no doubt about future success.
“We have great members in this society and everyone is ready to take it to the next level. We call it” evolution “because it requires some changes but is often feared.
“I have the opportunity to challenge. It’s all about how you see it.”
Keith Richards’ biggest win box out
Richards oversaw the establishment of the European Financial Planning Association-UK Mutual Approval Qualification Program, Pension Advice Task Force and Financial Vulnerability Task Force, which was launched in January 2021.
Outside the UK, we aimed to expand the reach of PFS overseas with new projects in the international market, such as the establishment of the Chartered Institute in Hong Kong in 2019.
Launched in 2020, PFS Asia promoted engagement with other regulators and governments in target and emerging markets.
He defended consumer initiatives near his home, including a free program of Money Plan with Civil Counseling and the Military Money Plan for military veterans.
This article was published in the June edition of MM. Click on the image below to read the full digital magazine.
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Outgoing PFS Captain:’There are so many opportunities for advisors. You need to see it ”
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