There’s an I’m all right Jack nuance to much of the commentary in these pages about the impending retail distribution review. Whether or not my own firm feels well placed as we approach the looming revolution is irrelevant – that is my business and no one else’s.
Have any of these sure-footed IFAs stopped to think beyond their own wellbeing and consider what will happen to everyone else who is potentially going to be disenfranchised by the RDR? Quite why some firms seem to want to boast about their RDR-readiness is beyond me. It smells of egomania and confirms what some of us have suspected all along – these are the very same firms that only care about their own clients, at the expense and exclusion of everyone else.
The FSA’s treating customers fairly initiative does seem to have the odd flaw when viewed in the shadow of the RDR. Up-market IFA’s and their equally well-off clients will be treated very nicely but for everyone else, if you believe half of what you read, independent advice will be withdrawn overnight.
However, I suspect the reality will be rather less revolutionary. The usual suspects will carry on overcharging, using clever language to describe what really is commission as fees, and the rest of us will soldier on as normal, trying to add value in everything we do.
The Winterthur pension application is a case in point. Buried deep in its carefully crafted contents are two pages of remuneration options, just ripe for a silver-tongued salesman to exploit.
When all is said and done, will anything actually change for clients? Customer-agreed remuneration could be the biggest red herring we have seen for years. After all, I was never sure it was possible to make fees disclosure much clearer than we already have. Fees may be unbundled from the product in fact but in practice, they will remain inexorably linked.
And that presupposes people actually understand the difference between fees and commissions. With the current industrywide confusion, what hope do they really have?
As with the recent anti-forestalling measures, the RDR simply has not been thought through properly. How is it that at this stage none of us truly understands what to expect from remuneration models? And worse, how can it be that the shadier contingent in our ranks are actually sounding pretty chirpy at the moment?
Tom Kean is a director of Thameside