What sort of summer for intermediaries and Europe?
And now comes the time for holidays for most citizens in Europe, but also time for everyone in their offices to have a couple of quieter weeks, dedicating their work to more fundamental tasks like reviewing their processes or closing late files that lie on their desks.
But after the first wave of transposition of GDPR, IDD (almost), PRIIPS and MIFID 2, it’s also time for questions.
If Europe is again asking about her future, advisors, intermediaries, producers and clients are doing the same - and for our advisors and intermediaries, it would be useful to spend more than a few weeks this summer creating their New Relationship Models, their processes and, at the end of the day, thinking about the goals and hopes for their SMEs.
Having said that, let’s have a look at the situation.
On one hand, we are facing authorities and, perhaps more than them, the EC, considering that they should “now and again” go forward and propose rules anew, for all of us, before any of the previously quoted texts have been fully applied and, by the way, their effect understood.
On the other hand, everyone is talking in the same sentence about the need for: “advice”, “self-assessment”, “cost reduction”, “stronger firms”, “best product”, “better education of both professionals and clients”, “financing SMEs” and … “less risk for investors”.
Then, perhaps it’s now time for our questions?
Is it possible to create, in an “ongoing manner”, new rules for the same situation – or, in fact, for the rest of our lives - hoping to create some profit from our industries to be invested in a way that may produce wealth for all?
Is there any situation in a normal life one should accept, where men and women are supposed to give advice and help a client but are forced to work harder for a decade on processes and compliance reviewing, than on the client’s situation but … are then accused of being paid too much when this money is increasingly used to meet costs - and their margins have fallen below the level of many industries?
Is it possible that the writers of these texts are hoping for a better advice process compared to what they expect from a situation where a producer is also the seller/distributer, particularly as our industry has the ability to avoid this?
Is it possible for the only people in that game who are expected to remain human, at least for the next couple of years (the retail investor), to put his or her money in one firm, for the welfare of the entire economy, without any risk? Is it possible for them to be educated in finance, when they don’t want to be in many cases – they just need advice and have only a few Euros to spare? They may not be opposed to “advice” from a robot but may well prefer advice from a person to whom they can explain their personal and emotional situation, perhaps because their dad is dead or their wife or husband has gone!?
Is it possible that the work of the Advisor or qualified Intermediary should always cost less and less despite the costs of his life and his firm’s running costs increasing? That adviser could of course be a robot. But we are all now discovering the real cost of automation (absolutely not free), the dedicated rules (more difficult to manage than with human staff), the resultant firing of some of our employees/citizens/Tax payers - but also the advantages (it’s quicker, it avoids “some” but not all mistakes, it offers a perfect employee, always in agreement with you or … not in agreement with you on one issue so you have to do things that fit in with the IT!).
So, the job is moving but costs keep rising - the price for global and not local security for clients and our economy. Is it impossible that the regulations that producers, humans and economic agents deal with can become reasonable and, as a minimum, let us adapt our IT or basic processes to one text, before creating another?
But, whether robot or human, our activities are still needed by retail investors and firms, and our market share is growing every year. At FECIF and at every Association, mostly our members, we help them to better understand and practically adapt to the ongoing new regulation, for the interest of our firms, our European economy and our clients.
So, dear citizens of Europe, advisors, intermediaries, clients, have a nice summer, but do keep it in mind. If our members do the expected job for a good adaptation to the new rules in the next 2 months, when they’ll be back at work, the world of finance, insurance and banking offered to the “normal” citizen you have known before, will have changed dramatically, for better or worse. A wedding phrase but the truth. Aren’t we all part of the same market, linked to each other, the client of one another?
And please, madam Europe, during this incredible year of 2018, we’ll use the summer in order to build the firms of the EC’s dreams, but let us take a breath after that …