View more on these topics

Less than half of advisers ready for RDR

Institute of Financial Planning chief executive Nick Cann says less than half of advisers have so far successfully made the business transition to comply with the RDR.

He said many advisers who think they are ready for the RDR have been focusing on exam qualifications rather than changing their business model.

At a Cofunds and Money Marketing round table on business transition last week, Cann said: “There is a great concern that many advisers are thinking about the transition by meeting the qualification requirements but are not actually transitioning their business. My concern is that more than 50 per cent are not ready to perform profitably and successfully in 2013.”

Veracity chief executive John Baxter said that the FSA should not delay the RDR implementation date.

He said: “If the regulator wavers on the time scale it will be an absolute betrayal. There are a number of advisers who have invested in themselves and their business, you cannot delay this any more.”

Baxter added that businesses that have not started to make the switch to an RDR-compliant model by now will not meet the 2013 deadline.

He said: “For those businesses that have not made decisions early enough and are only now starting to think about it, it is too late.

“If in 2013 individual advisers are able to demonstrate they have been trying to get to the necessary level but were unable to, there is a case for a transition period, but absolutely not across the market.”

Roundtable
Round table members, from left: John Baxter, Mark Polson, Verona Smith, Money Marketing editor Paul McMillan, Jason Witcombe, Kim North and Nick Cann.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. Even that assessment is optimistic. Many advisory firms that have amended their business models are yet to stress test them. When they do, the business failures will begin in earnest. It has taken our firm several years to move to a sustainable income model that is RDR compliant. I agree however that no delay should be allowed. If a large part of the industry is going to collapse, get it over with and then we can all get on with what is left. Sadly clients and employees of advisory firms will pay a huge price. Heaven knows what the media will make of it……

  2. I’m still not convinced that there is a market for more than 5 to 10% of existing Advisers if RDR goes ahead as proposed. Even if 100% are ready on time many will still not survive.

  3. Just because a business has not made the transition yet does not make them a “bad” business as they may have traded sucessfuly for years and be fully qualified.
    The main issue is the “general IFA” small practice without a large HNWC bank my not be commercially able to change to the new model due to demographic reasons (they are in a middle to low income area) and so may not be able to generate enough fees to be profitable.
    The advice, ethics and products remain the same apart from the remuneration model. The only thing that is really changing is the clients CHOICE to pay for products and services by a fee OR commission to just a fee!

Leave a comment