Redefine time is positive part of RDR

5 November 2009

One of the many things I have discovered after more than 20 years at the coalface of journalism is that issues us scribes get excited about do not necessarily trigger the same level of enthusiasm among readers. After a while, they stop wanting to read about them in enormous detail.

A classic example of what I mean is famine in Africa. Today, at least 25 years after reports of starving children in Ethiopia appeared, there is a certain sense of weariness among people, even those who want to help. There is even an expression for it - compassion fatigue.

My guess is that a similar set of emotions is beginning to take hold in relation to the retail distribution review. In that sense, it is a shame that Aifa’s last-minute contribution to the debate - its so-called “RDR manifesto” - is unlikely to receive the attention it deserves beyond a few fed-up financial advisers agreeing with many of its sentiments.

My own professional interest here is less to do with its timing but in the contents of the submission itself. It strikes me, again, that what Aifa is doing is playing to the IFA public gallery.

For many months, Aifa had very little to say publicly about the higher educational standards demanded by the RDR. I have been to and spoken at several public meetings and conferences attended by leading Aifa members and this was never identified as a major issue.

Suddenly, having discovered that many IFAs, particularly those in their mid to late 50s, are unhappy over the demand that they must sit more exams, Aifa is now getting hot under the collar. Last week’s statement that “the FSA needs to reaffirm its RDR objectives, so that it can be held accountable for delivering them”, as Money Marketing’s Nicole Blackmore reports, is a sign of this.

So is its demand that “no good firm should be put out of business by arbitrary dates imposed by the regulator” or for work-based assessment and vocational training to be recognised as equivalent to qualifications. As I said last week, and as Alan Lakey himself is cleverly picking up on, there are two words that explain this turn of events. They are “Adviser” and “Alliance”.

Similarly, it is interesting to see that, by contrast, in another section of the IFA trade body establishment, the silence on this last-minute opposition to the RDR’s higher qualifications’ initiative has been deafening.

I am referring here to the CII and the PFS. Again, both bodies might well claim they have in the past come out strongly in support of ratcheted-up professional qualifications for advisers and there is no need to do so again.

Yet within the IFA trade press in particular but also on many websites, the debate over grandfathering and the deadline for reaching QCA level 4 has become intense in recent weeks. If so, the CII and PFS’s unwillingness to take part in a discussion in which they are uniquely qualified to contribute is telling.

It would be unfair for me to speak about the RDR without also pointing out one positive aspect of the whole process IFAs have been going through in the past two and a half years. For many, it has meant redefining what they do and how they do it.

In some cases, this follows many years of previous efforts to position themselves as highly professional client-centzred businesses. A classic example of this is Informed Choice chief executive Nick Bamford, whose firm has just launched the website www.brilliantwithmoney.co. uk, edited by his son Martin.

Nick’s proposition is simple: “…If some one wants to buy an Isa, a personal pension plan or a collective investment arrangement…advice is in the minority via the web but this is now beginning to change.

“So here is a view of one intermediary model…. It is a segmented offering where financial planning is provided either face to face or in comb-in- ation with an online approach. The firm then offers a website where the consumer at low cost, with whole of market choice can execute solutions identified for them.”

It has to be said that this is only one firm’s vision of what changes are likely in the next decade or two. Other readers will have entirely different business strategies.

My own view is that Brilliantwithmoney is a great concept but the fairly basic information it provides so far does not make execution-only transactions that much easier for prospective users. Just as well, as there are not links in any of the articles that would lead people to transact, a strange omission.

What Nick and Martin really need to provide is a site that delivers not just word-based content but the analytical tools which allow people to make the “Informed Choices” they need.

Still, it is early days yet: Brilliantwithmoney needs time to bed in and evolve as Nick and Martin learn more about their users and what they want. Certainly, as a trust-building exercise for the face-to-face part of the business, it is a very good start.

Ultimately, it is these micro decisions about how to take advisory businesses forward after the RDR that will determine the future of IFAs after 2012. It is a shame, in many ways, that some trade bodies’ final submissions to the FSA do not appear to recognise this.

Nic Cicutti can be contacted at nic@inspiredmoney.co.uk

 

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