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Garry Heath: Delay RDR by 2 years

The retail distribution review should be delayed for two years to allow an overlapping European directive to be introduced first, according to former IFA Association director general Garry Heath.

Speaking at a PanaceaIFA conference in London this morning, Heath said the implementation of the RDR, currently set for January 1 2013 ,should be delayed until the new markets in financial instruments directive is in place. It covers similar ground to the RDR, including adviser remuneration.

He said: “I really suggest we should stop doing this. We should be going to Government and saying for goodness sake stop this, at least for the next two years until Mifid comes in and we can have one thing for the whole of Europe.”

Speaking at the same conference, Institute for Financial Planning chief executive Nick Cann said: “Even if you delayed this by two years the businesses are still not going to make the changes required so we will be in exactly the same situation.”

But, Heath was adamant, warning that although wealthy investors would continue to receive advice many lower earners would find it too expensive.

He said: “Trying to stop the RDR is a very difficult thing to do but on the other hand how many millions of clients will be thrown in the abyss, getting no advice or, even worse, bank advice.”


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There are 32 comments at the moment, we would love to hear your opinion too.

  1. I’m sorry I disagree we have known that RDR has been coming 4 years and I don’t think it’s fair on the individuals that have taken the time to get qualified to now delay only to have individuals that haven’t bothered to have a further two years left in the industry.

    I’m sorry that that sounds coldhearted but if I count the amount of time and money spent on studying for exams only to have it delayed by two years – I like many who have bothered now want our payday from being unique and qualified.

    I take it Gary that you do not have all of your exams.

  2. RDR is a disaster waiting to hit the consumer between the eyes, in the teeth and to cap it all, a kick up the rear end.

    The “Unintended consequences” put forward by the FSA are very intended, do away with the major part of the IFA sector and hand the distribution of financial products to the banks.

  3. Soren Lorenson 23rd May 2012 at 3:31 pm

    I partly agree with Garry and think a delay would be wise.

    However, I think that RDR either needs to be cancelled completely or go ahead on time. I can’t face another two years of uncertainty hanging over us (although this is probably what MIFID will do).

    RDR will not work and will be an utter disaster for the majority of IFA’s and their clients. The only way the regulator will accept this is to see it for themselves. They won’t listen so it’s time to show them how stupid they’ve been.

    It will be too late for most of us by then.

  4. Anopn @ 3.05
    A delay has nothing to do with qualifications.
    The whole thing is an ill thought out social experiment. It is a disaster waiting to happen.
    You go ahead and advertise your qualifications to anyone interested enough to care.
    After the RDR they maynot be worth the paper they are written on.
    I completely agree with Soren, either go ahead with the train wreck or put the brakes on and grind to a halt.
    Is there anyone at Canary Towers with enough sense to admit this is just plain wrong?

  5. Sick to death!
    Of smug people.
    Of the FSA
    Of the RDR
    And stupid articles sent to wind everyone up!
    Yep, sick to death!

  6. RDR and Exams – two different kettles of the fishes….

    RDR.. great in theory (as is the likes of auto enrol(l)ment), but an absoute nightmare in practice….

    Bring it on or throw it out… but a delay.. death by 1000 cuts…


  7. Just to balance out the first comment in this thread, as a Certified Financial Planner with no exam activity required under RDR I would wholeheartedly support a two year moratorium.I would also be delighted if the whole thing was binned tomorrow.

    The driving out of the industry of IFAS of a certain age who do not feel able for whatever reason to return to an exam room and who have been offering a decent and worthwhile service to their clients for many years is despicable.

    The apparent glee of certain IFAs who have now secured a level 4 qualification and are looking forward to cherry picking those clients who will become available as a result is nauseating.

  8. I qualified three years ago and got advanced papers too. Three points. One: virtually everything I learnt then is now out of date and no use at all. Two: Gap fill information came in too late, and despite advanced exams I still have lots of work to do in very little time. Three: I spent 21 years building up a business based on commissions from product providers. How could I possibly design a new business model in my spare time when they are destroying the one I spent 21 years building?

  9. Anon@3:05. Do you think there will be a ‘meaningful’ IFA sector after RDR and even if there is, how long will it survive? You sound like a turkey voting for Christmas.

  10. Anonymous | 23 May 2012 5:25 pm

    Yes I do

    Blair Cann | 23 May 2012 4:40 pm

    Excuss me for cherry picking

  11. Absolutely agree with delaying RDR until the European Directive has been introduced.

    There are also far too many holes in the current RDR plans for it to work.

    Just how aware are people like Vince Cable, George Osborne and the PM on the job losses being caused by te implemetation of RDR. Surely they should be sticking up for our industry at a time when stimulating economic growth and protecting jobs is the number 1 aim….

  12. Delay is the right thing to do on all fronts

    Most, probably like myself are struggling to run a business, revise, adapt, oh and maybe spend some time with my family.

    As for the “i’m alright jackers” (love that phrase) you will not have lost anything you will have revised will are still revising but you will benefit from being miles ahead of the game.

    But do you know what, we have forgot about the client wont they be the ones to benefit the most by the delay.

  13. Anonymous quote states that having done everything it would be wrong not to implement RDR.
    If it is such a good thing go ahead and trade under the RDR proposals . If slimmer of the year was abolished would we all go down the pub and eat pork pies ?

  14. Blair Cann
    You are a gentleman.
    Anon @ 3.05 Good luck.

  15. Don’t we like the” I’m alright Jack attitude” that some people have.
    (“I’m sorry I disagree we have known that RDR has been coming 4 years and I don’t think it’s fair on the individuals that have taken the time to get qualified”*)
    The mercenary attitude trading like vultures at the misfortune of others is despicable.
    The refreshing attitude of many other advisers such as the more mature advisers that have been giving good advice along with the fact that RDR is not just an exam is to be applauded.
    The adviser that thoughtlessly wrote this must surely know that RDR 4yrs ago is nothing like we think it is going to be and as it is constantly being changed will we ever like it.*
    Along with many others I also say let’s review it properly in 2yrs time or better still let us get on with providing our clients with what they want not what the FSA is telling us what they want.

  16. Christopher Lean 23rd May 2012 at 7:23 pm

    I think that this is too much too soon.

    Pragmatism has merits, deal with one thing at a time. The public will have no issue with level 4 ( or higher qualifications) as this demonstrates a move to professionalism in the public mind. I know that there is no substitute for experience, but a methodical shift to qualifications will only enhance the IFA sector.

    Once the public understand that IFAs have to be qualified to a certain level, then there is more chance that they will understand that the IFA sector is moving to a profession. Having got their heads around that, the public might understand that there is a value to advice.

    Moving forward, the rest of RDR could be implemented gradually.

    What I am not able to understand is the rush to RDR. From where is the pressure to implement RDR so quickly coming from?

    At the end of the day, it should be the consumers that pushes for change as they are the end users. Are the consumers pushing for this?

  17. Garry, I cant see your argument for delay at all.

    FSA have decided that they need to ban commission for all advisors.

    Even when Mifid bans commission for some advisors, FSA will still feel the need to ban commission for all advisors.

  18. When something is ill-thought out its introduction should be reconsidered.

    When something that has taken six years to prepare is subject to disruption by EEC mandated changes it should be reconsidered.

    When something is devised by fundamentalists in ivory towers and the fall out is catastrophic for UK consumers it should be reconsidered.

    I continually hear arguments along the lines of “you’ve known its coming for years”, or “Wake up and smell the coffee” and “I’m allright Jack, Gill and Nick” but these views falter under scrutiny.

    If something stupid, deleterious, expensive and potentially catastrophic is looming over us do we meekly sit back and say, okay we give up, let the vandals win? Or do we continue to shout the truth, the reality that what is happening is totally stupid, some would say corrupt.

    My views will not change just because the catastrophe is on my doorstep.

  19. It’s interesting to see that the people that the people that are calling me a smug adviser are probably largely unqualified for RDR, and like many advisers who have chosen to get qualified, in my circumstances have worked extremely hard to obtain level 5 qualification.

    To Brian,

    If you think you’re going to be able to trade beyond 2013 as a Financial Planner, still benefiting from our industry but not paying fees, then think again, as people like me will be campaigning very hard with the regulator, and indeed if necessary taking court action to get the regulator to enforce the regulations as I don’t see the reasons why unqualified people should give advise and break RDR regulations.

    With regards to commission, legacy commission is unaffected by RDR and therefore it is only on new contracts that any adviser needs to worry. I think RDR is an extremely good idea as it forces advisers to disclose fees, for far too long our industry has failed to do this even with commission disclosure. I wonder how many of you who are shouting so loudly against RDR have failed to disclose your commission in full by not supplying the last page of an illustration or leaving the commission amount off a report.

    After all why do you think we needed RDR in the first place? because of a small percentage of unscrupulous individuals who ruin it for the hard working financial advisers who only want to give quality advise.

    So in closing, I hope that there is no delay in RDR and the remaing IFA’s put pressure on the regulator to enforce the regulations that advice should only be given by licenced individuals who have obtained level 4 qualification and are registered.

  20. There is a saying –

    ‘you cant polish a t*rd’

    RDR is a t*rd and no amount of polishing will ever change that – it should be stopped simple as.

    There is no merit in saying you’ve known about it for years that doesnt make it right and to be honest if somebody from on high came out and said – we’ve made a mistake with RDR they would go up in everybodies estimation immeasurably.

    The fact is that only now when its on our doorstep have a large number of individuals as well as providers woken up to the train crash coming (god knows why its taken so long). Capitulation never works nor is ‘well lets make the best of it’ – IT WONT WORK now everyone realises it – so for gods sake just stop it and stop it now !

  21. @ Smug Adviser
    Will educated people like you be giving your clients advise rather than advice?

  22. So you are all right Jack? so you are ahead of the game – well done. You have a commercial advantage.

    If you dont why do you expect the regulator to give one?

    Trashing other peoples livelihoods and financial futures on milions of clients is not the way forward.

  23. Anonymous | 24 May 2012 10:18 am

    @ Smug Adviser
    Will educated people like you be giving your clients advise rather than advice?
    Ha Ha you just beat me to it – smug adviser is obviously an idiot!
    So what these ‘I’m all right jackers’ are saying is, “we are now fully qualified RDR LEMMINGS, lets ALL throw ourselves off the RDR cliff!”
    Good idea – throw yourselves off the cliff!

  24. Nigel Barker-Smith 24th May 2012 at 12:14 pm

    Why does RDR suggest advice becomes expensive and the lower earners will miss out?

    The costs will be the same, its just RDR will hopefully show them clearly what they’ve always paid.

    If they now think its expensive then it proves that most in the industry have nothing of value to sell.

    Starting with the client and what they value (and therefore will pay for) will be a nice change compared to most in the industry who are interested in nothing other than how to justify a large income.

  25. Nigel Barker-Smith – this is the point. Non ‘High net worth individuals’ also benefit from face to face advice but cannot afford the cost of this advice up front! The previous model of giving everyone appropriate advice with the payment to the adviser built in to the product generally worked. Although a relatively small commission was received in many cases, sometimes only covering overheads, the client still received top notch advice. With RDR – they won’t be able to pay for this advice and therefore will have to go elsewhere – read banks or make uninformed decisions themselves or worse no decision. You’ll probably react by saying that others were subsidising these clients but that’s what happens or I suppose you could retaliate with “if they have no bread, let them eat cake!”

  26. Sorry I don’t get it? all of a sudden the general public cannot afford to pay for advice just because commission has been banned and advisers have become more qualified?

    Are we saying that people cannot afford to move house and receeve legal advice for that transaction?

    Are we saying that people cannot afford legal advice for when they get divorced?

    Are we saying a company cannot afford to have it’s accounts prepared by a chartered accountant?

    The answer to all of the questions above is that the vast majority of the general public can afford transactions when needed and many people moaning on here need to spend more time looking at business models and passing exams rather than wasting time trying to change a regulation that is really there to protect clients from advisers who never disclose their true earnings.

  27. Mark Coughlin 24th May 2012 at 4:11 pm

    Smug Adviser | 24 May 2012 3:04 pm

    I think you will find that quite a lot of people in this country can’t afford legal advice, hence the number of no win no fee firms.

    The RDR is flawed and though there is nothing wrong with improved qualifications, I’d wager that for 99% of the population there is no need to have a Level 4 qualified adviser for the type of advice they need and want.

  28. Smug Adviser
    You really need a spell checker.
    Perhaps you should pay someone a fee, before making yourself look any more foolish.
    You purport to be a professional yet appear unable to follow the most basic rules of spelling.
    Are you able to use a calculator ok?

  29. Commission pays for work done for a product provider as well as covering an amount paid for “advice”. Once commission is banned independent advice is finished. Once customers of so-called fee-based advisers realise that after 2012 they will not be getting commission rebates they will melt away…

  30. Bye to all the people moaning!

  31. Would it not be possible to postpone the remuneration part of RDR until Mifid is finally adopted across the Europe for a couple of years , but keep the Level 4 qualification requirement from Jan 1st.
    This would demonstrate the professionalism of the industry and allow providers to get there house in order and adopt systems for trail etc.

  32. @ James That would make sense if we did nt have such high failure rates on the academic side.Seems that there are now questions about the questions being asked.

    Gap filling is still a mss too

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