Press Releases

Portfolio International
February 2004
The same rules - different strokes

Financial advise is just like playing golf, says Brian Cosgrave, CEO of Inter-Alliance International, you need to know the rules, but not be a slave to them.

Enjoy playing golf. So does Tiger Woods. I know the rules. So does Tiger Woods. Come to think of it, we both play to exactly the same rules. But, he makes all the money.

Tiger works hard practising and improving his skills. He doesn't spend hours fretting about the rulebook and doesn't need a referee to constantly tell him what he can and cannot do.

For some time now, many international IFAs have been worrying about regulatory change and how they might have to react to it. They're changing the rules, some say. Well, no actually. They are applying the rules, I say. The rules of common sense, of quality advice and of minimum client service standards.

Jurisdictions worldwide have been addressing the need for professional qualifications, higher standards and greater accountability where financial advice is being given.

But let's get all this talk into perspective. Regulators actually want us to make their life easy. Really, they do. But they also have a duty to protect the people we advise. So they write rulebooks to inform us of what we can and cannot do and we are expected to operate within those rules.

And what are these rules? Know your customer; ascertain and agree your customers' needs and risk profile; provide the reasons why you have advised on a particular product or service; explain the risks involved and, perhaps, how you are remunerated. That's pretty much it. It's common sense.

Learn the rules once and that should be it. Just like golf.

To compete in the new regulatory environment you will have to abide by the rules. So learn them. To be a winner you'll have to go further.

It will not be good enough to merely play within the rules. The winners will be the ones who play to the rules but who also raise their standards above the competition. The obedient will survive; the truly fit and skilled will thrive.

My advice is not to get bogged down in the minutiae of the new regulations. You don't need a compliance officer to get you fit; you need training, you need to invest in yourself, in your skills and in your service proposition.

The new environment will demand that you put the effort into providing a quality service to your clients. It will be about doing the right things the right way all of the time; it will be about quality advice and service.

From now on to be a player you have to play within the rules. But to be a winner, nothing has changed, you'll have to train yourself to excellence.

So, I'm giving myself another year or so to beat Tiger, then? No problem.