The RDR debate shifts again perhaps seismically. We now have the striking news that Norwich Union has suggested that primary advice is dropped in favour of assisted purchase, that a minimum exam requirement should be the Diploma in Financial Services and that CAR should apply across all advice channels.
There would be things in these suggestions that advisers might find difficult to cope with. There is still a hassle factor and many advisers will insist that their experience should count too. But this seems like a remarkable change in the tone of the debate.
NU also dealt with the independence issue – arguing for whole of market, independence of model ie CAR, and asked the question whether independence of ownership from providers should come into play too.
It may be something for Thinc to think about and Positive Solutions too while in the case of Sesame does it matter who owns the network or support services provider?
I cannot help feeling this is an important issue but still not the main one. The main one, I would argue, is not about labels but whether advisers can cope with changing model, getting more exams and finding more capital adequacy and that is therefore why NU’s ideas may appeal.
Had this been the suggested in the RDR then perhaps Money Marketing would have been much less strident in its criticism. Instinct tells me that while no adviser would want to take more exams than he or she feels is necessary for them to do their job, they may feel this is a target they could reach if they had to.
At the Bankhall roadshows I spoke at in the last few months, the principals of the Bankhall IFAs were surveyed on whether they thought the various exam requirements were achievable. The majority felt in the timescales suggested of three to five years that they were not. If NU’s proposals were to be used by the FSA then I think many more would be able to make the grade.
The NU proposals may still prove controversial but rather than being too much for advisers who have no recourse but opposition to them, what NU is suggesting at least forms a basis for discussion about the way ahead, although one can only wonder what the ABI makes of it all.
Of course, the debate among advisers did not stand still either this week. AWD’s group chief executive Mike Kirsch who until recently knew a lot about NU’s thinking as one of its directors, also offered some strong views on the RDR,
The firm that encompasses Chase de Vere and what was once Thomson is to be an early adopter of Customer Agreed Remuneration but Kirsch also says that providers must shift systems too. He may have been stating the obvious but noone has said it so forcefully. He also suggests that providers must change things for in force business too.
But he also believes that the regulator should be concentrating its fire here and that if it wishes to up exam requirements or capital adequacy such changes should come later.
Kirsch seems serious about wanting to become a leader of IFA opinion which is great news for the sector given that AWD is actually Europe’s largest advice group when its continental operations are taken into account.
After last week’s announcements by Money Portal it seems that adviser firms are taking the initiative. Combined with the NU proposals, the ground seems to be shifting which is good news for most advisers. I also think that advisers who have suspicions about exactly what NU means by assisted purchase should think twice.
The Government will insist that a way is found to reach some people who are not saving. If that can be done without forcing advisers into a badly thought out primary advice channel as the RDR currently suggests, then it is definitely worth considering.
Of course, until we hear from the FSA itself, nothing can be taken for granted. The RDR and prudential papers still stand and for most advisers represent a nightmare. We don’t know if opinion has changed at Canary Wharf where changes of opinion really count.
We can’t relax and start debating a more benign RDR until we know it is going to be more benign. I would be very grateful if having read the full interview with David Barral online and in this week’s issue, and considered what Mike Kirsch has to say, you could let me know what you think.
Has this usually cynical journalist been taken in by the intelligent, charming Mr Barral, or is there something to work with here? Let me know at firstname.lastname@example.org.