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Categories:Advisers,Regulation

FSA: Over 70% of advisers are RDR qualified

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Research from the FSA suggests over 70 per cent of advisers have already obtained an RDR appropriate qualification.

Speaking at an FT Intermediary Forum event in London yesterday, FSA head of investments Linda Woodall (pictured) revealed the results of the latest research carried out by the regulator to assess firms’ RDR readiness.

Out of 3,897 firms that responded to the FSA’s survey, 71 per cent say they are already RDR qualified, with a further 22 per cent studying.

A further 69 per cent of firms say they have developed and begun to implement a plan to be RDR compliant across all the requirements. The same proportion of firms told the FSA they have begun to tell their clients, or have told their clients, about changes under the RDR.

However the FSA notes that smaller firms are ahead in communicating the RDR changes to clients, with only 36 per cent of larger firms having done so.

The regulator has identified gap fill as a “weaker area” of RDR progress. Although 67 per cent of advisers need to gap fill, to date 39 per cent have completed it while 42 per cent are in the process of doing so and 19 per cent are yet to start.

Woodall said the number of firms who have yet to start implementing an adviser charging model “remains a big concern”.

The FSA’s survey found that 59 per cent of firms are relying on an adviser charging model, but among larger firms the figure drops to 32 per cent.

Woodall said the FSA is stepping up its assessment of firms’ RDR readiness, and says more face-to-face time with firms to review progress will be an “important part” of the regulator’s work this year.

She said: “We are visiting the larger firms whose business models are more complicated, such as banks, building societies, insurers and networks to make sure they will be ready.

“RDR implementation will appear on the agenda for our supervisory meetings, for both small and larger firms, to ensure that the market as a whole is moving together towards practical solutions that will lead to the best overall outcomes.”

Woodall said the FSA has held briefings with larger firms to discuss specific RDR implementation risks, such as life offices being able to provide RDR compliant products, and networks ensuring their appointed representatives meet the RDR requirements.

She said the regulator itself has also been working to communicate the RDR to consumers with a leaflet advisers can give to existing clients and by speaking to consumer groups.

 

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Readers' comments (41)

  • 70% sounds a bit high but I would wager that 50% are already qualified.

    From 1st Jan 2013 I will no longer be able to deal with any clients who have less than £100k to invest as it's no longer viable and £100k has to be the absolute minimum. As things stand I am able to conduct financial reviews for clients on the basis that many of them will choose the commission route and setting up insurance/pension plans for them makes it worthwhile to me (and to them!).

    Leaving no mechanism for these people (the majority) to receive advice is a disaster. I agree standards in the industry needed to be lifted however IFAs generally have a good reputation and there was no need to change the status quo.

    You can now see the savings gap grow and watch the richest 5% of people in the UK become richer compared to the rest.

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  • Having been in this business over 20 years, I know the IFA community is a) very moany and b) very adaptable.

    We shall continue to see whinging on a daily basis on forums like this, but at the start of next year 90% of IFAs will continue on.....

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  • @Tyburn You are quite right, there is no mechanism for ordinary people to get advice (you can discount the MAS). It endemic as when you attended a seminar in the past, the examples always given were concerning High Networth Individuals and never John Doe. We had to adapt our advice to include the poor (read ordinary people) and now these people will not be coached in financial life skills (again you can discount the MAS as any 'advice' they give has to be generic, wishy washy so as they cannot be held responsible). When the RDR is finally enacted, the financial well being of the masses will be gone and it will take decades to recover from the RDR folly. Which & other consumer groups will have cried wolf once too often and the misguided FSA will have destroyed the economy.

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  • In answer to IFA 5.04pm. I too have been in business over 20 years and have offered my clients fees for that long also. Still doesn't mean I think RDR is the answer or will solve amny of the past problems we have. I see no proff of that at all and at least after 20 years I am man enough to disclose who I am, what do you fear ?

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  • Just to throw this out there - I'm getting level 4 qualified from scratch, and it's not exactly difficult. For any experienced and competent adviser it should be a walk in the park.

    I know there's also time,money, revision and out-of-the-office periods involved in booking and sitting the exams, but nothing excessive. I've funded most of my exams myself so far but I'm sure most will fund their level 4 qualification through their business/employer.

    Is this post-RDR qualification business actually half as bad as most comments make out? Discuss.

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  • I hate the FSA and everything they stand for. I hate every single statement they make and the way they lie and twist statistics for their own benefit.

    They should all be thoroughly ashamed of themselves.

    They are total low life and the reason that this business will shortly cease to exist.

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  • Matt Worthington, you're a heretic

    First you go and state that getting to Level 4 isn't hard, true but inconvenient for some.

    Then you commit the ultimate sin in blogging using your own name!

    Next you'll be questioning whether clients really do want their IFAs to take 8% commission on an investment bond!

    You won't last!

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  • This survey was emailed to directly authorised IFAs. However there was no check made on the answers so I assume many IFAs who have not made a start on their exams were not going to say so to the FSA. They would just say what the FSA wanted to hear and the FSA have just accepted the responses as gospel! From my experience 70% are definately not already qualified and are still hoping it will all go away!!

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  • I don't doubt that many experienced IFA'S could easily potentially reach level 4 (& even beyond) - but the thing is- it is the PRINCIPLE OF RDR that grates. Would a Solicitor, Doctor Accountant etc retake exams after practising 20 years or more
    I THINK NOT!
    Also with going 'up-market (in the case of my own client-bank anyway) It's like putting a PORSHE dealer in BANGKOK! You just aren't going to make any money - so what's the point!

    If you do or are lucky enough to make any money / living - the FSA will take it off you due to the drastic reduction in IFA'S and ever expanding compliance' !A no win situation really!

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  • @Matt. You haven't passed your exams as yet, so on what basis are you a judge of the process? By all means level a judgement when, like some of the rest of us, you have actually passed ALL of the exams.

    By the way, the last stage is far from being a shoe-in, but good luck with it and prepare your time well, you will need every second, as there is such a thing as being over-confident, hopefully you are not!

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