20th August 2009

The end is nigh?

With the RDR Consultation paper very much in every IFAs mind, providers have all made great efforts to review the review and extract the key points for you.

AEGON/Scottish Equitable have recently produced this documententitled “Thinking ahead” which we believe you will find easy to read and provides great clarity.

Many of our members are expressing concern that this propsed overhaul of the delivery of independent financial advice maps out the end of the road for many IFAs.

David Harrison, formerly of Positive Solutions and now the Senior Partner of True Potential sees things a little differently believing that RDR offers IFAs a fantastic future. 

In Money Marketing, he says that there have been too many in the industry that have used the RDR for their own ends to try to panic IFAs into believing that the RDR is bad for the small practitioner, or you will need a PhD, as if large firms or purely academic qualifications were either required or offered some magic solution.

The opposite has been the case and the RDR (if it comes about) offers a fantastic opportunity for the professional IFA but big problems for banks and big conglomerations of multi-tied sales advisers (pseudo IFAs). It clearly signals that independent advice is key for the consumer.

The Conservatives clearly have a different view as to whether the FSA has been effective. In terms of whether the FSA should be pushing it now or not is, I think, academic. The main reason for the RDR was to encourage greater savings, which should also be the main purpose of any future regulator and would be a good measurement of a regulator's effectiveness, for example, the ratio of saving versus borrowing, rather than some vague mission statements or principles that no one can obviously measure, which means you are regulated by opinion, not by hard facts.

IFAs should simply ensure they are focused on delivering professional service to their clients and are moving their reward systems towards a recurring-income model. There are much bigger external influences driving the market than RDR and those that get their business model right will have a fantastic future. IFAs are in a great position and should make the most of it.

What is your view - click here and post in the forum.

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