An Interview with Elizabeth Scott – Assessing The Future of the IFA Industry
Fintuity is rapidly growing and as such we are proud to introduce the newest member of the team! Elizabeth Scott is a seasoned IFA and joins Fintuity as the latest member of our IFA consulting team.
So you recently joined Fintuity, can you tell us a little more about your background?
I started off my career as a Lieutenant in the Armed Forces Reserves in Aintree, Liverpool in around the year 2000, while I was finishing my Masters degree in Evolutionary Psychology at the University of Liverpool. I tried the year long course at the Royal Military Academy Sandhurst but decided it wasn’t for me, married my Fiancé Chris, an Officer in the Royal Artillery, and became an Army wife for the next 12 or so years. I worked in Germany as a press officer for the Garrison before our posting to New Zealand, where I worked as a finance assistant for an Estate Agency. We moved back to the UK in 2011 and I had a maternity replacement role in Catterick with Carillion, as an administrator. When that was over I moved to Hastings to start my teaching degree in Brighton and taught Chemistry for 5 years before going back to finance and becoming a financial adviser. I’ve been advising now for 2 years and I’ve never been happier.
The IFA sector has been invariably impacted by the COVID-19 crisis, how would you say the next 18 months looks for the industry?
It has been a difficult time for the IFA sector with falling market values having a significant effect on client portfolios and thus the value of our businesses. I would say the next 18 months will give IFAs a chance to recover some of that lost value as there is never a better time to prove your worth than when a crisis hits, whether that’s advising clients to do nothing with their investments or to move money around to try to take advantage of cheaper prices. We have already seen recovery in the markets with some portfolios recovering entirely to their pre-covid values, especially those weighted more heavily towards North America for example, although it’s impossible to say whether this particular strategy will enable people to ride out a second wave.
From an IFA perspective how important would you say technology is to the future of the industry?
Technology is a vital part of our future role, enabling us to spend more time actually getting to know what is important to our clients. Robots can take a lot of the mundane, boring tasks and make them faster and more efficient, and keep our clients up to date with their investments on a daily basis rather than delivering a quarterly report which is already out of date by the time it reaches the client in the post. DIY investing is already popular and is fine if you know what you’re doing, but many of the clients I speak to at Fintuity have no idea what is best and have historically done nothing rather than risk doing the wrong thing with their money. This is where face to face advice is invaluable – a robot simply can’t make decisions which are very personal to the client as no algorithm can ever replace a human relationship. I forsee a future where tech and humans work closely together in a symbiotic manner, improving services and keeping our costs lower so that we can become better value to more people who have less money, and also be better at forming those close bonds with our clients that allow us to do the right thing more often.
We live in a time of change – do you see any change to the regulatory outlook and burden to IFA’s?
Regulatory changes are part of our business and always will be. We have to work hard to be of good value to our clients. Now that Brexit has happened the UK will be more free to make its own decisions but will still be underpinned by the highest commitment to international standards, with ongoing equivalence to the EU. We are a little in limbo at the moment but we expect gradually to feel the changes to UK prudential rules and changes to the rules for investment firms. I think these alterations will affect how we do business and who we do it with, but not our commitment to do our best for our clients.
Fintuity is the only digital IFA in the UK – how would you say Fintuity differs from its traditional competitors?
Fintuity aims to fill the niche between traditional, in person advice and sterile, robo-investing. Companies like having DIY investors because the investor takes the burden of risk upon themselves – we call it a direct sale – and the investment firms have the benefit of customers without the risk of being sued for bad advice. In-person advisers carry a lot of the risk of advice which is part of the reason why they are expensive – insuring a financial adviser against a legal claim is not cheap! Fintuity has an advantage over these traditional in-person firms as our business structure allows us to keep costs low while providing a service very similar to the traditional role but using digital methods such as video calls and electronic paperwork. Our clients are free to book meetings when they are convenient, such as an office lunch break, because all they need is a device with Zoom installed. There’s no need to arrange to be at home or travel to the adviser’s office so we are fast and efficient. We also have algorithms built into diaries which mean a financial review will not be missed, so the client is cared for all year round. I think our future will bridge the gap between robo and in-person advice in an extremely efficient, low cost manner, which will mean that those who previously felt that advice was too expensive will be able to access better value professional help.
If you had to predict the year ahead, how do you see uptake in IFA services given the current economic and health crisis?
I think that everyone should see a financial adviser because it’s our job to stay on top of regulations and legislation so that our clients can take full advantage of all the tax breaks available to them. The aftermath of the Covid situation is likely to mean some tightening up of certain tax rules as the Government tries to fill its coffers again, such as Capital Gains and Inheritance Tax, with possibly less leniency on small businesses and pension taxes. It would be wise for people to get their finances in order before it’s too late. From a health standpoint, we all need to plan for a time when we are no longer here; as we have seen this can very happen suddenly, which has always been a true fact, but possibly more apparent at this time. It’s too late to plan after the event. I think that people now see the value of getting their affairs in order at an earlier age, and so I hope that we will see a rise in the number of adviser appointments booked; even a small investment can grow significantly in value given enough time and a good insurance policy can provide significant support to a family who have lost a loved one at a time when money may be suddenly very tight.