It’s the final countdown. Some of you will remember the 1980s’ hit by Europe, which, when I heard it on the radio last week reminded me that many of us will be counting down the days and months this year to December 31.
There has been a host of surveys and in-depth research, including the PFS’s own member survey, to try to establish how ready firms are and, in most areas, results are broadly the same.
The FSA published some commissioned research in December that showed the percentage of advisers with an appropriate qualification as at August 2011 was 50 per cent.
For PFS adviser members, CII exam records confirmed that 54 per cent were qualified as at September, increasing to 58 per cent by the end of December.
The majority of the rest are well on their way, with an estimated loss of advisers now expected to be less than 10 per cent.
Progress with qualifications is relatively easy to track but business readiness is more difficult. On a positive note, our survey, conducted in October last year, shows PFS members are more confident in meeting the retail distribution review requirements than in the previous year.
There was a notable drop in the percentage that claim to be finding the transition to adviser charging difficult, from 39 per cent in 2010 to 30 per cent in 2011.
The percentage that stated achieving the qualifications and meeting capital and regulatory costs would be difficult also fell to 27 per cent and 25 per cent respectively and slightly surprising was that, at 32 per cent, “recruiting or replacing advisers” still had the highest score in the difficult or very difficult box, despite a significant decrease from the previous year.
The progress that firms have made is commendable but many will need more to complete the task. With just 11 months to go, there are numerous unanswered questions that have the potential to have an impact on running an advisory business and, in particular, on its operations. More specifically, still outstanding from the FSA are the final rules relating to platforms and rebates, final rules on legacy commission and further guidance on the applicability of the rules relating to independence.
In addition, members are calling for final guidance from HM Revenue & Customs on VAT and adviser-charging. None of the above should delay firms in establishing a service proposition and remuneration structure but they will need to ensure they have the right systems, controls and processes in place to support their businesses, which may not be possible until the necessary guidance is available.
Let’s hope the wait is not much longer.
Fay Goddard is the chief executive of the Personal Finance Society