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Hogarth: We will soon know the winners and losers of the RDR

What a year this promises to be. First, we have a long awaited spectacle where the very best of the best will compete against each other in a desperate race to the finish. The winners will be showered will praise and glory while the losers will fall by the wayside.

I am talking, of course, about the Olympic Games but following that is another race, which the entire financial services industry is desperately training for – at least, they should be. The RDR is just round the corner.

As the year progresses, I think we can expect to hear a lot more noise from some platforms, providers, networks and other IFA groups, all desperate to show how ready they are for the RDR. Those who are not ready will be keeping a low profile but it is only a matter of time before they are exposed.

It is about now that reality will start to kick in, especially for those who have not yet started the process of making their business RDR-ready. This is not something that can be achieved overnight and those who are only just starting the process are going to find it a long, uphill struggle.

This period of time can be seen as a warming-up session, if you will, ahead of the starting gun, which we will hear at the end of this year.

I believe that throughout the course of this year the winners and losers will be identified. I am not just talking about those who will be ready for the RDR and those who will not.

By the time we hit that all important deadline, I believe we will have a much clearer idea of who is likely to survive in the industry over the next five years.

The winners – the Olympians of financial services, if you will – are those who have already begun the transition towards the RDR and have made their business sustainable for what comes after.

Those who have not yet begun this process are likely to struggle in the years to come – the financial equivalent of trying to run a marathon with no training.

In common with those who are taking part in the Olympics this year, the key for those in the industry is to keep their eyes on the prize.

Instead of medals and world records, the prize for us is simply to be in a good shape by the end of the year.

The countdown has well and truly begun and those who are not prepared are going to be left standing when the starting gun sounds.

Paul Hogarth is founder of Paradigm Partners


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There are 7 comments at the moment, we would love to hear your opinion too.

  1. I think we already know the winners and losers. Winners banks building societies and tied staff of some insurance companies. Losers the average man in the street who will not get access to an IFA

  2. I am anticipating rather more losers than winners. In 12 months time a large amount of brown stuff will be hitting a political fan and it will be going everywhere.

    The public are going to wonder why something they previously had has been taken away from them for seemingly no benefit whatsoever. IFA’s will go bust and their support staff will join the many thousands fired by the banks this year.

    Many people will find themselves considerably poorer, except of course, H Sants.

  3. absolutely anonymous 2.56

  4. I have read the article twice and both times I heard the ‘whoooosh’ of reality, flying over the head of someone who has, it seems, not engaged in client-facing activities for many a year!

    Correct me if I am wrong though Paul!

  5. Oh, and furthermore, what exactly is your point Paul?

    Is it to condescend to the community from which you made your millions?

    No self-respecting IFA should want to see their colleagues struggle, or go out of business, and your article seems to suggest that RDR should be about the survival of the fittest. My view is that financial advice needs to be available as widely as possible and in whatever forms and to whomsoever needs it, and for that the beneficiaries of the product solutions should be the sponsors, much as they always have been, because they are the ones who will profit the most!

    Olympians?? This isn’t a game and analogies are not required!

  6. Oh, and to finish my outburst, before anyone says that RDR has taken away the options which I have outlined; this I know, much to my dismay.

    However, we don’t need another person telling us to change our modus operandi or die, unless of course they can bring something more practical to the discussion table.

    I think we know that for many there isn’t a realistic solution for fee-charging, at a level where their business may be able to prosper and so such articles are pointless in what will, for many, be a ‘suck it and see’ environment!

  7. I am quite literally stunned by the number of people I meet in senior positions in IFA firms who really haven’t engaged with RDR at all to speak of. Apparently 57% of firms have nobody at all qualified to Level 4. I spoke to a friend yesterday who is a very successful adviser who wanted my advice as to which route he should follow to start his level 4 quals this year. Like many others, he is confident that he will pass in time. He wasn’t aware of the need for a Certificate of Professional standing even if he does pass in order to keep advising.

    It is becoming hugely apparent that swathes of the advisory community will not be able to meet the RDR requirements to carry on in 2013. Whether they will shorty afterwards remains to be seen, but I guess many firms will start giving guidance rather than advice (MAS style) until someone becomes competent to advise again, and the FSA will find it close to impossible to police the whole disaster due to the massive numbers involved. Ah but that’s the Compliance Officer’s job I hear you say – yes, but most of those are totally confused and at the end of their tether as well, and of course in small firms, the roles are usually held by one person who also advises.

    I quite understand that there is a segment of the industry positively basking in the warm righteous glow of chartered status and a (allegedly) fee based culture. This segment relishes the thought of legions of under qualified ‘cowboys’ being put out of work. Sorry, it won’t happen. All those resilient folk will switch to doing things they are allowed to do with existing quals, and plenty more I expect will engage in guidance and off the record advice. The terrible mess will be misreported across the media and it really is impossible to tell how extensive the damage will be to consumers and the reputation of the advisory community in general. There will be those vampires who make a quick shilling out of others misfortune as ever, but overall, RDR will be a very dark period for the industry – I wish it wasn’t the case, but the facts speak for themselves.

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