Paul Resnik: Why IFAs must get intimate with clients 

Jenna Towler reports

MiFID II has been designed to “confuse clients” but provides advisers with a great opportunity to make better use of technology and deepen relationships, delegates heard.

Finametrica co-founder and director Paul Resnik said while regulatory requirements set out in MiFID II, which came into force in January this year, made advisers’ lives more complicated it was an opportunity to talk to clients more frequently and develop stronger relationships.

Speaking at PA360 about risk and retirement goals, he added the best thing advisers can do is to build intimate client relationships as the profession is driven towards commoditisation and increased use of technology.

He added the “antidote” to commoditisation and intrusive recording and documentation requirements, brought about by such regulations as MiFID II, was intimacy with clients. He added while the use of technology was “imperative” if advisers wanted to build a long-term business it was important to ensure service quality above all else.

“Advisers need to find a reason to talk to clients, building around their needs and emotions. All of us are just intimacy tools. As well as obligations to have good records we want them [the clients] to have good service.”

Resnik said while MiFID II was bringing greater transparency, for example with its requirement to report any 10% value drops to clients, it would actually undermine client confidence – which in turn is an opportunity for advisers to help calm the waters.

“Mifid II serves the IFA market very well but will require advisers to make use of technology and the intimacy opportunities that it provides,” said Resnik.

Down Under

Resnik also pointed to the current problems being unearthed in Australia by the Royal Commission into misconduct by banks and pension funds. He said ongoing charges for little or no service was a key finding of the commission and warned regulators around the globe “talk to each other” and similar investigations in the UK could follow.

He said: “The greatest challenge of planning is helping clients work their way through retirement. I have spent 49 years in financial services. Every year I think I understand what is going on but then something happens which changes that.

“Retirement planning is so complicated but I always say we get the regulation we deserve.”