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Letter to the editor: RDR stats only show part of the picture

Dear Sir,
 
You recently reported the drop in financial advisers during 2012, but the reductions in people does not reflect the reduction in the availability of advice.
 
The key figure was the 44 per cent (3,849) reduction in bank advisers. The average bank adviser will see more new customers (some will see 5-10 per week) and have larger client banks than most and, more importantly, they predominantly deal with the lower net worth clients.
 
Thereon, 20 per cent IFAs and tied advisers have stopped trading last year in the run up to RDR and 20 per cent of those remaining have lost customers (80 per cent reported no loss of customers).
 
It appears the opponents for RDR have been proved right and that the access to advice has been significantly reduced and that it will now be the preserve of the wealthy.
 
Also, while many might cheer at the reduction in bank advisers, they have been the training ground for many IFAs and the banks have successfully initiated many of their customers getting investment advice instead of leaving it in their savings accounts.
 
 
Arron Bardoe
Director
Temple Capital Finance Ltd

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Comments

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

  1. I agree with Aaron, but then I was often accused of being one of the RDR “naysayers”. I had my level 4 well before the deadline, have been adviser charging for 4 years or so and turnover is starting to go up now I only focus on profitable clients and not customers. BUT the point was having become an IFA for a bank in 1992 and subsequently spent 6 years as a tied bank adviser, I felt I knew enough of how the banks would perceive RDR, to for see the outcome we now have of a massive drop in availability of basic advice to the mass market. No one has stepped on to the gap as the FSA were too busy playing musical chairs and didn’t want to hear anyone singing a different song.
    To Hector “Who is still singing?

  2. I’m still struggling on with a few barely profitable clients, both existing and new, though most of our turnover comes from longstanding clients with portfolios of reasonable size.

    Existing clients who have to be cast aside or new ones unable to pay the necessary tariff will probably either do nothing or try to do it themselves or maybe find someone so desperate for new clients that they’ll do it on the cheap and, as a result, possibly not very well.

    Is this what was envisaged by the FSA when it cobbled together its grand RDR experiment?

  3. We had someone come into our office the other day, looking for advice, for which he did not want to pay.
    He took up about half an hour of our time. He was really looking for the best bank with the best rates and the best cash isa’s.
    He wanted us to advise him as the nearest bank is far away and he did not want to travel but wanted to do it online himself. Needless to say he was not very happy when we said we were not prepared to advise on any of these matters.

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