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PFS research suggests 20% of firms not RDR-ready

Fay Goddard 480 Alt

Research from the Personal Finance Society suggests 20 per cent of firms are not ready for the RDR, based on a member survey from September.

The professional body polled 2,298 of its members in September and found that 90 per cent of respondents believed they were RDR ready. This proportion dropped to 80 per cent when advisers were asked whether they believed their firm was ready.

The remaining 20 per cent of advisers identified implementing an adviser charging model and a lack of service and cost disclosure documents as the most common outstanding areas that need to be addressed. Others include VAT liability, client segmentation and defining the client proposition and whether to offer independent or restricted advice and capital adequacy.

PFS chief executive Fay Goddard (pictured) says: “I am concerned advisers are leaving it so late to make these changes.”

Writing in this week’s Money Marketing, she adds: “Of the minority who are not ready, around half still need to complete gap-fill and the rest, either to complete the level 4 qualification or obtain an SPS.

“Eighty per cent of respondents considered their firms to be ready and outstanding matters were much as expected, with the majority of those who felt employers weren’t ready suggesting they needed to implement new service and cost disclosure documents and establish adviser charging models. If this statistic is representative, one in five firms needs to seriously get a move on.”

Sovereign IFA director Mark Hibbitt says: “Some advisers have focused on getting their exams and forgotten about the business impact of the RDR.”

Click here to read more on the PFS’s research.


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There are 13 comments at the moment, we would love to hear your opinion too.

  1. Ready ourselves for what? It seems that we still do not have a clear indication of what we will be working with as yet.

  2. I fear these laggard firms may include people who have spent the last 5 years arguing against the inevitable, instead of just getting on with what we were all told was going to happen.

    I might not agree with all the changes, but we’ve got down to dealing with them, and we don’t envisage any major problems next year as a result.

  3. ken170647 youtube 2nd November 2012 at 9:19 am

    Recent survey of tadpoles found that many were unprepared for life jumping through the air and croaking…

  4. Are we RDR ready? No
    Will we be ready? Yes
    A survey like this is meaningless unless you define what ready actually means. In our case there are a few things still to do and we await clarification regarding VAT for example. But it is all in hand and we are confident we will be ready. So we like many others are not quite ready but what is the problem?

  5. “I might not agree with all the changes, but we’ve got down to dealing with them, and we don’t envisage any major problems next year as a result.”
    Such as a drop in your income, ever more regulatory charges, higher PI costs, clients that won’t deal with you because they don’t want to pay the costs of doing business with an IFA, lenders who put ever-more obstacles in the way of every type of client who wants a mortgage (self employed don’t bother), more FSA regulatory regulation, less provider support because they feel its too expensive, claims chasers making your life a pain, complaints from clients about pathetic fund performance, lower remuneration, FSCS levies, FOS charges, increased network charges, then of course the FSA lurching from one area to the next in an attempt to justify its existence. That’s just a few I can think of. Apart from these I don’t envisage any major problems either.

  6. Looks like everything is blooming and rosey in the Goddard garden !!!

    Maybe she has just been told all advisers to be level 6 by 2015, + more posh dinners and money of the backs of IFA’s

  7. Ready or not, here comes the FSA steamroller to ruin our lives and businesses and get rid of us pesky iFAs once and for all.

    Once the FSA has ruined our sector, they will pass over full liability to the as yet still unaccountable FCA.

    What a country!

    At least Greece now has a free press and they don’t need to be afraid of authority trying to gag them.

  8. 20%…!

    I suspect it’s much much higher than that.

    Most IFA’s I speak to are taking the ostrich approach to fee charging; that is, business as usual..3% fee for an investment etc. Trust me…this wont work.

  9. Becoming a headcase IFA 2nd November 2012 at 10:08 am

    I know what most of us would like to do to that smile on Fay Goddards face.

  10. I love the comments these type of articles attract. Rather than moan about the RDR just get yourselves ready! Christ!

  11. Financial advice is free at the moment, so why would customers want to start paying? Of course it’s free. Going direct to a unit trust provider doesn’t reduce charges. The provider pockets what would be paid in commission. Going direct for a structured product doesn’t get you the product without the commission deduction (that is before the adviser charging products appeared). To get the commission discount customers had to go to a discount broker. The press financial pages are full of them. Point is though, financial adivce is currently free of charge despite the nonsense of “cost of advice” in illustrations…

  12. I agree with those who think that 20% is on the low side – and I am not surprised that there is a difference of opinion between businesses and advisers!

  13. Ned Taylor… so Greece has a free press… I guess you haven’t read about the Lagarde List fiasco then!

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