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IFAs need to widen range

IFA firms offering independent, multi-tied and execution-only services will be the most successful business model in the post-RDR world, according to a panel of industry experts.

At the Money Marketing RDR and economic update last week, Ernst & Young financial services partner Shaun Crawford said organisations will need to offer a more diverse range of services alongside independent advice. He said: “The bigger the organisation, the wider the range of distribution they are going to need.”

Independent consultant John Cowan said the RDR is going to be a big driver of consolidation in the industry.

But he added: “That does not mean the small IFA will not succeed, they will still deal with high-net-worth people and they will be successful in their own right.”

Positive Solutions chief executive Jim Reeve agreed firms will have to offer a range of services, including non-independent advice, post-RDR.

He added that the IFA of the future must also be more confident about their offering.

He said: “I suspect that there is an element for some of a victim mentality that they think they are inferior to banks and are penalised by the regulator. I think that great IFA busin- esses are confident about what they do and stand up and tell the world how great they are. I think that will be a very distinct difference between what we have now and what we will have in the future.”

Bankhall managing director of IFA services David Golder said: “I have a concern that there is a great deal of focus on regulation and responding to that regulation as opposed to offering what I think is the objective and that is a genuine service and advice to a wider consumer base.”


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England vs Australia: pensions

Well, the cricket season is here, and England and Australia are stepping up to the wicket. Although we compete with each other in the sporting world, when it comes to pensions, Australia’s pension programme is held up as a model for our auto-enrolment initiative. Auto-enrolment was introduced because people weren’t saving enough into their pensions, and it is still early days but signs are positive. However, in Australia, saving into a pension is compulsory, and in fact employers are the ones who have to pay in. Employees in Australia can make additional contributions into their pensions, but they don’t have to. Should the onus be on the employer or employee to save? Well in the UK we think it’s both, but to get ‘adequate’ savings for retirement it’s the employee who has to pay more in.


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