Meeting

Accredited financial planning firms ‘demonstrate highest professional standards’

The Institute of Financial Planning (IFP) has carried out a benchmark assessment of accredited financial planning firms in conjunction with management consultancy the Phil Billingham Partnership (PBP).

The online survey was conducted in February and March 2014, with 47 of IFP’s 65 accredited firms taking part.
 
The survey found that financial planning firms are well resourced with over two support staff per financial planner.
 
They use top quality external support and software, they have clear investment processes which reduce their regulatory risk and they have clear business plans.
 
The outcome of these attributes is they are generally very well placed to expand and grow their businesses and they receive an extremely low levels of complaints.
 
Steve Gazzard, CEO of the Institute of Financial Planning, says “Accredited financial planning firms represent excellence in financial planning. They have successfully undergone the IFP’s rigorous assessment process to demonstrate that they operate at the very highest professional and ethical standards through the calibre of their staff and the service they provide to clients. Accredited financial planning firms must meet IFP's strict criteria covering areas including adherence with a code of ethics and practice standards, following the six step financial planning process with cashflow planning as a default service, attaining qualification standards well ahead of the FCA required levels, providing clarity of proposition and fees, and evidencing an ongoing commitment to effective CPD for staff.
 
“It’s clear looking at the consistent results of our first benchmarking study, and particularly in the outcomes for consumers, that in many key areas this is a group where great minds really do think alike. We hope that through publicising these results we can help the profession develop best practice and accelerate the growth in financial planning firms delivering great outcomes for consumers.”
 
Phil Billingham, director of PBP, adds: “It’s interesting that the accredited firms which responded to this survey are 100 per cent independent – and that’s because it suits their clients. It’s a commercial choice. It is also clear that these firms have good underlying profitability, and are well structured.
 
“Between them, these firms look after some GBP6.5bn of client assets, with a combined total turnover of around GBP55m per annum. If these firms were one firm, we would be looking at a market capitalisation of perhaps GBP140m. If you combine these facts with the lack of complaints that the firms receive, it confirms that accredited firms are not just good at getting ‘accreditations’, but really are firms that set very high internal standards indeed.
 
“The challenge now is for firms to take these standards and the clear internal vision shown, and to grow their businesses and increase their profits. The good news is that this first benchmarking survey shows they are very well placed to do so.”

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