Matching expectations

oversized-boxEarlier this morning, a small but plucky man from DHL, staggered up the stairs to our office bearing a very large cardboard box, quite the largest I had seen for some time.  It was the kind of box which would have comfortably accommodated an average-sized Albanian family who, having given up on the idea of clinging to the underside of an articulated lorry, resorted to mailing themselves through the post.

In fact, it turned out to be a long awaited part for our Xerox colour printer.  Before opening the box, I reflected on how much larger it was than the printer itself, and worried that we had been sent something which was intended for a more ambitious installation, such as the Large Hadron Collider at CERN.

Thankfully, the mystery was soon solved.  Right at the bottom of the packaging, surrounded by plenty of scrumpled brown wadding, was the part we had ordered - it was not, after all, something that could help us prove the existence of Higgs-Boson particles, or generate black holes.  Secretly, I was a little disappointed.  I had begun to fantasise about connecting it to the national grid, watching whole areas of the UK plunged into darkness, whilst stroking my white persian cat and saying "Vary clever, Mistair Bond..."

Of course, those kinds of powers belong only to those residing at Canary Wharf.  The rest of us have to contend with oversize packages, containing very mundane components for our Xerox's.  And as my mind resumed its more ordinary course (that is to say, one which does not necessarily involve dreams of global domination), I began to wonder how much of our advisory or wealth-management propositions might resemble that cardboard box?

Big promises on the outside.  Lots of meaty paperwork as packaging.  Pretty sizeable fees.  A lot of effort, and huffing and puffing.  And yet, when all is said and done, all a bit underwhelming.  Perhaps too late, or too nonspecific to make any real difference.

'RDR World' has seen a rush towards the 'One Percent Model'.  For many IFAs this is a perfectly valid development - they deliver an excellent client review service, and have re-engineered their advice process to optimise the outcomes for their clients.  But, undoubtedly, for many others that hike in charges has more to do with their personal aspirations than anything substantive generated for the client - it is not unreasonable for expectations to rise in proportion to remuneration, but often that is not what occurs in practice.

Major Update!

We have substantially updated our Fee-Based Advice resource, to take into account the first six months of experience in RDR World, and also to reflect on the FCA's supervisory emphasis.  ValidPartners can download their own copy by clicking here.

Kevin Moss, 28/06/2013