As we look back at 2019, we might be forgiven for thinking that in the context of the good, the bad and the ugly, there has been a lot more of the latter than the former.
If we tackle the ‘ugly’ of 2019 first, I would have to put the virtual collapse of the professional indemnity market due to defined benefit transfers at the top of the list.
Sadly, the financial advice sector is once again in a situation where the actions of a minority of companies are impacting the well-being of the many.
Frankly, I take no pleasure whatsoever in once again being right, but the reality is that from the moment George Osborne sat down in 2014 after announcing so-called pensions freedom, we warned it was a recipe for disaster.
Indeed, a glance back at my regular column in Financial Adviser finds numerous attempts to alert the profession – and the regulator – to the dangers of DB transfers.
We all know that there can be occasions when a DB transfer may be the right recommendation; however, such situations are uncommon.
Unfortunately, the regulator and numerous advisers ignored the warnings until much too late, and now the sector (and the regulator) are left picking up the pieces.
The result is an incredibly difficult PI market, with cover for DB transfers virtually non-existent and premiums going through the roof.
A very ugly situation indeed.
Looking at the ‘bad’ for the financial services sector as a whole, and for a lot of individual investors, has been the collapse of Neil Woodford’s empire.
His fall from being the darling of the investment world to an untouchable has been swift and dramatic.
The term ‘hero to zero’ could not be more apt and, because his public profile, was so strong I think the damage his collapse has caused will be longer lasting than some commentators have suggested.
With some relief, I now turn to the ‘good’, which, for me, has been seeing the profession that I love continue to become more professional and successful throughout the year.
We often assist the companies we serve with their Gabriel returns and it is self-evident that, despite all the challenges that have been thrown at them, the individual companies we serve have become more successful and more profitable in 2019.
Given the many hurdles the advice sector has had to face in 2019 from the bad and the ugly, it is real pleasure for me to end this on such a positive note.
Ken Davy is chairman of SimplyBiz Group
