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MM Leader: RDR impact must not be underestimated

With the RDR deadline only 19 months away, there is growing concern that firms are underestimating the radical business transformation changes that will be required.

Understandably, the focus for many has been on obtaining the new qualifications. But firms may well find that adapting their business models to abide by the RDR rules on charging and independence are a tougher hurdle to overcome.

At a Money Marketing round table event last week, a range of experts, many of whom spend their time visiting IFAs across the country, were united in their view that the advice sector is in a state of denial.

A year and a half until the new rules are due to be implemented, this is a dangerous state of affairs.

Important decisions need to be made about the type of charging structures that will employed and what client segmentation strategies are required.

This has not been helped by a lack of clarity from regulatory bodies. There is still a huge amount of confusion regarding the issue of VAT, which extends beyond adviser charging to other areas of the market. A clear set of notes from HM Revenue & Customs is needed.

Firms also await a definitive answer on whether cash rebates will be banned, a decision which may hit charging strategies.

However, despite these regulatory clouds, there are many things advisers should be doing to prepare themselves for 2013. There is no point in passing all the required qualifications if you do not have a viable model in place to stay in business.

E for effort

You can understand the Investment Management Association’s agenda for replacing the active, balanced and cautious managed sectors with the letters A, B, C and D.

Keen to avoid another arch-Cru-style embarrassment when the range was placed in the cautious managed sector, the trade body wants to absolve itself of any responsibility if a similar debacle occurs in the future.

What is less clear is how the consumer will benefit from this very strange proposal which will create less transparency and more confusion. Perhaps if the IMA review had included more than a tiny number of IFAs, a more sensible decision could have been reached.


FSA cancels mortgage broker’s permissions

The FSA has cancelled the permissions of mortgage broker Julian Paul Cheetham, trading as, due to unpaid fees and levies of £1,137. In a final notice published yesterday, the regulator said it had “repeatedly” asked Cheetham to pay the fees. The notice says: “This failing, which is significant in the context of Julian Cheetham’s […]

PSigma’s Becket says Japan could leap by 40%

PSigma chief investment officer Tom Becket plans to move to a more overweight position in Japan across the firm’s funds. He says the potential for acceleration in earnings’ power and margins in Japanese global exporters will improve with a weakening yen, which he expects to see over the next two years. He says: “The prospects […]

How can you put a price on fluffy people skills?

It will be difficult for advisers to marry up the “intangible benefits” that an IFA provides with the reality of having to ask for an advice fee, says Taxbriefs editorial director Danby Bloch. Speaking at a Money Marketing round table on adviser-charging last week, Bloch argued it is difficult for advisers to put a price […]


Guide: reporting to the Pensions Regulator — what and when?

Johnson Fleming has published a step-by-step guide demonstrating the importance of record keeping and reporting, and how it can ensure you operate a successful scheme. The guide takes you through some key questions you need to ask and identifies the information you need to obtain. The topics include: why you need to keep records and the benefits of doing this; registering your scheme; what information you need to record to ensure you meet the Pensions Regulator’s requirements; and what items need to be recorded and when.


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There are 2 comments at the moment, we would love to hear your opinion too.

  1. Maybe the trade media might just stop focussing on the qualifications issue and praising the efforts of the CII etc and begin to think about ways in which help can be given with the business process – without which all else will fail.

    Why not feature people who make a profit rather than those who have a glory wall full of certificates.

  2. Or feature those with both higher qualifications and who are profitable in recognition of the well known fact that the two are not mutually exclusive?

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