At the Liberal party conference recently held in Liverpool, Lord Newby, Liberal Democrat Treasury spokesman in the House of Lords announced to a fringe event that “the traditional model of the IFA looks to me like a doomed species.” He’s probably correct but for all the wrong reasons.
He added, “I do not think they (you and me) would want to go through the appalling business of laying out all their details and taking an hour to go through everything the way we did when we were buying financial services products.”
The furore his comments caused via various online websites was highly entertaining as many maligned IFAs made the valid point that the IFA sector has changed for the good and continues to evolve.
To add insult to injury Lord Newby believes that while “people will want financial advice, they will want it free” and we will only want to buy products off the internet. These comments are illogical and a recipe for financial distress and an impoverished future.
Surely the Lib Dem Treasury spokesman for the House of Lords should advocate a system that provides individuals with access to proper financial advice, rather than rubbishing an industry already over burdened with regulatory requirements. Suggesting that the internet provides the best solution does not smack of a well thought-out argument.
It’s akin to using the internet for self diagnosis when you’re feeling ill, which I’m sure has led to an increase in hypochondriacs and much unwarranted stress, only to discover through professional medical advice, that what we thought was life threatening is wide of the mark.
As companies empower employees, with the move from DB to DC schemes, to manage their own financial affairs, the need for professional qualified financial advice is something that Lord Newby should be urging us all to seek.
Given that our financial wellbeing is within our control, I for one am think that spending an hour providing details of my financial situation to a professional IFA is time well spent to plan and protect my financial health and wealth – and yes I’m very happy to pay for that advice.
While Lord Newby does “hope people do take financial advice they will want it free and they will want it delivered electronically”, he once again scores an own goal and this from someone that used to be a tax inspector and hence should know the importance of proper financial planning. The question I have for Lord Newby is does he practise what he preaches or does he take advice – I suspect it’s the later!
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