I feel quite aggrieved by the RDR, even though I know as well as everyone else that nothing is going to stop it. This may sound a bit rich coming from someone like me who, in principle, is easily qualified to level six and has been using a fee-based model/ client-agreed remuneration for over four years.
I am convinced those who come through the RDR process will excel. They are likely to see business incomes rise because of increased costs to pay for reaching the new benchmarks and they may benefit from the double-digit contraction in the provision of financial advice, irrespective of recent and, in my opinion, slightly ambiguous surveys suggesting otherwise.
So why am I so annoyed? Regulation changes are nothing new. Those of us who can remember as far back as 1988 will recollect what was effectively a total change in the regulations and the way retail financial services were to be provided to investors. I remember many people leaving the profession at that time.
In 1994, we saw another significant change with commission disclosure, which had the aim of reducing contract charges by allowing investors to see transparent costs and enabling them to shop around. However, the overall effect was to see costs rise rather than fall.
But I think my biggest bugbear is I am not convinced that the consumer will be better off. In fact, I think they will have, on average, less choice because of falling adviser numbers, meaning they will have to pay more for the same service they get now. And I am sure we will rinse and repeat this operation in 15 years, when those in power at that time decide that the RDR has not worked. At the age of 45, I will survive this time round but I think I will fall at the next furlong at 60.
With my gap-fill nearly complete, I am about to apply for my statement of professional standing certificate to allow me to continue to trade after 2012. I have not decided which body to use for my SPS and will enquire if I can get two certificates because of my concerns about being effectively “authorised” by one organisation. You may want to think about this, because it could be a licence for the SPS provider to print money.
2012 is a big year for us all and next year looks like it will be a turning point. With our SPS certificates nailed to our office walls, I hope that this time round, the changes will be of real benefit for all, although you can probably guess that I rather doubt this.
Keith Churchouse is director of Chapters Financial