View more on these topics

Nic Cicutti: Who should push the RDR message?

A few weeks ago, shortly before disappearing on a brief holiday, I wrote a column in which I discussed my disagreements with Garry Heath, the former chief of the IFAs’ leading trade body Nfifa.

Garry had, in his own inimitable style, called for a halt – or at least a lengthy delay – in the rush towards the implementation of the RDR. I disagreed, arguing that the die has been cast and it was too late to stop the inevitable.

Our disagreement produced a massive influx of emails to me and messages on Money Marketing’s website. In the course of the debate, I went back to what the FSA was saying on this issue to see if there was any hint, no matter how remote, that the regulator might be receptive to calls for a stay of execution.

There was no such intimation. Indeed, what was striking from the regulator on the subject was the assumption that the RDR is now a fait accompli. If there was a better definition of “racing certainty”, I have yet to come across it.

One of the clearest indications of this came in a speech in mid-April from the FSA’s investment department head Linda Woodall. Her speech is posted on the FSA website and I would urge anyone who still harbours any delusions on the subject to read it.

Where Woodall appeared to be less confident, however, was in the way she addressed the matter of how consumers ought to be told about the RDR. This has become an increasingly crucial topic. Surveys of IFAs show again and again that advisers want to know what the regulator plans to do to prepare the public for this change.

One of the latest is a survey of Fundweb readers, where a poll found 81.5 per cent did not feel the new rules were being promoted to consumers. The vast majority of advisers want an awareness-raising campaign on the benefits of the RDR, at least according to another survey by Cofunds.

Cofunds sales and marketing director Alastair Conway has a point when he says that given the effort many IFAs have put into preparing for the RDR, both personally and in terms of their business proposition to clients, “they’d like to see that effort matched in raising awareness among the general public of the benefits of RDR and the professional standing of financial advisers.”

Yet the evidence suggests the FSA is unlikely to meet those aspirations. In her speech to the FT Intermediary Forum in London, Woodall told her audience: “Creating awareness is a priority for us and I’d like to share our consumer awareness activity with you today.” At which point, it all started to go downhill.

“To target the right messages, we have segmented consumers into two groups, the ’engaged’ and the ’non-engaged’,” Woodall said. “First, the ’engaged’ – we see this group as people who already seek investment advice. They have a basic understanding of their personal finances and need to know that the way they get investment advice is changing. Research suggests this group represents about 17 per cent of the population.

“The other ’non-engaged’ group represents the rest of the population, some of whom may only seek advice once in a while in relation to a life event, for example, receiving inheritance. While you have a duty to discuss changes that affect your clients, we recognise the importance of the support of the regulator’s view.

“So to reach the ’engaged’ consumer, we have prepared a leaflet designed to give you something to use when speaking to your clients – to help explain why you are creating a fee-charging structure, for example – or to simply hand out as general awareness of what is changing. The leaflet is available to download from the FSA website and has been sent to trade associations and accredited bodies for distribution.”

I have seen the leaflet – it is rubbish. It talks in such general terms about the RDR changes that it is hard to work out what on earth is happening and whether it is for the better or not.

Just as much of a cop-out is the second element of Woodall’s stated strategy, that of “getting out and speaking to consumer groups and organisations…they are the best placed to communicate to [consumers].”

What she is saying is the FSA is effectively abdicating responsibility for directly telling the general public about the RDR in a targeted way.

In fairness, she has a point. It will be radio, newspapers and TV stories as opposed to advertising that will be key to making consumers aware of the new environment for advisers and their clients. But the right kind of advertising and marketing can lay the groundwork for those stories – and on the evidence presented by Woodall, that is not going to happen any time soon.

If this is the case, then the question IFAs must address urgently, plus their trade bodies, organisations like, and those sections of the life, pensions and investment industry who obtain the vast bulk of their business from independent advisers, is how to mount that marketing effort themselves.

Between all of them, the money is there or some of it. The business case for doing so is also there. What it needs is the political will. Do the various parties have it? Let’s see.

Nic Cicutti can be contacted at



Restricted advice scrutiny warning

Sesame has warned that restricted advice firms that only offer clients access to a small number of fund managers run the risk of attracting FSA scrutiny. Speaking at The Platforum Technology Showcase in London last week, Sesame head of strategic proposition Darren Smith said even restricted advice propositions needed to have a wide range of […]

Think small to build big

Small advice firms offer platforms the best opportunities to increase their assets, says software provider Focus Solutions. Speaking at The Platforum Technology Showcase in London last week, Focus lead business consultant Martin McKenna said larger distribution firms look to spread more of their business across a number of platforms with a back office software system […]

Processing in the iPipeline

US insurance technology firm iPipeline is integrating technology onto Assureweb that will enable annuities and protection policies to be processed online through the portal. Following iPipeline’s acquisition of the UK firm in May, it is looking to make automated processing of policies available to advisers. Speaking at The Platforum Technology Showcase in London last week, […]

2015: a divergence in economic policy?

As the US continues to confound growth expectations and the eurozone’s ‘will they, won’t they’ saga has finally concluded, what are the implications for global markets? James Dowey, Neptune’s chief economist, puts forward his outlook for 2015 and the key considerations for investors.


News and expert analysis straight to your inbox

Sign up


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

  1. Based on the tone of her colleagues (and soon to be ex-colleagues) speechs in the past that, shortly thereafter sounded their exiting the FSA, I will be looking out for the announcement of her leaving in th ecoming months. They set plans in motion that cost our profession hundreds of millions of pounds to adapt to and scores of millions annually to maintain and then one by one they move on leaving someone else the job of trying to mop up. Its disgraceful.

  2. The FSA do not begin to understand the mood of the public on this issue, so asking them to be able to address the consumer in an engaging way is not only beyond their said scope, it is beyond their ability I’m afraid and they are most certainly not going to ask us on the front-line how to go about it.

    It’s just a shame that they do not have the humility to admit that they need to reassess this matter, but its what we have come to expect.

  3. Good article by the way Nic…You actually sound as if you are concerned for us in respect of the hill that we will have to climb, which is pleasing to read!

  4. So how much is the marketing budget for MAS?

  5. When you read this article do you, as an adviser feel that you have just been banging your head against a brick wall for the last three or four years.

    Telling our clients how they need to behave in the future in terms of what services we will provide to them and what they need to do to pay for them.

    The “wider” public have received no such information and will continue to believe that financial advice is free.

    The 1st January 2013 is judgement day!

  6. Whilst I am not in agreement that the RDR offers any solution for the consumer it is ridiculous to think that at the 11th hour it will be possible to defer or suspend its implementation. The FSA do not understand what they are doing and seem to be a company of egotistical idiots intent on making their mark and moving off to the next ship that is in no danger of sinking to see if they can influence its journey to the sea bed.

  7. I wanted to respond but all energy and enthusiasm is drained out of me!

  8. derek Bradley ceo 28th June 2012 at 4:52 pm

    “What she is saying is the FSA is effectively abdicating responsibility for directly telling the general public about the RDR in a targeted way”.

    That is it in one Nic. Our survey on the subject led to an FSA meeting being arranged via Martin Wheatley with Ms Woodall that she sadly did not/ chose not attend.

    Nic is also correct on the FSA pdf on the subject, that is rubbish and was originally wrong, corrected by APCIMS.

    There is no plan, there was no plan and there will be no plan to deal with this.

    The industry is on it’s own.

    You may find this link to our survey helpful in understanding why-

  9. Oh dear…as we sail towards the iceberg, the FSA/Titanic will not change course and we will be left with fragments of an industry…we will have do pay for it, like everything else…no wonder it’s expensive to give advice, turkeys/christmas and all that…and if Banks can’t afford to run it profitably, what hope for small/one man band businesses? It’s a disaster…pure unmitigated disaster…

  10. It’s like building an economy on an ever increasing mountain of debt – sooner or later the train will hit the buffers. In the case of RDR the buffers appear on 1 Jan 2013 – and frankly it’ll be down to individual advisers / firms to manage the resulting wreckage.

    One might have perhaps hoped, given MAS remit to educate the populace at large, that they might have had some input, but so far their only contribution of “come to us – we’re the breath of fresh air that’s free” rather sums up their view of the value of financial advice. It will be hardly surprising that many members of the public may follow where MAS have lead.

  11. Nic, at last a balanced, non confrontational towards IFAs article, telling it just as it is. BUT, I can’t help thinking that you and you colleagues have witnessed the long drawn out demise of an important sector giving access to all, to independent financial advice without reporting on it and the effect on the public of losing this valuable asset – perhaps you yourselves just don’t know the value?. Only those that can afford it will have access and if the MAS are expected to fill the gap, that is most unlikely. Have you ever interviewed someone who has used their service? Face to face meetings where you the customer is the prime motivation for advice is being legislated away. As access to the IFA declines, they will inevitably be thrown to the banks where their record of putting the client first speaks for itself and as we all know, the IFA RDR model is unworkable and unsustainable for most, so the funding for MAS will eventually fall to the taxpayer (or the Banks – where people will eventually have to be referred).
    OF course financial journalists probably already have their clever headlines ready for when independent advice bites the dust, but I still think that there were lost opportunities for them to do their jobs properly and to have alerted the public and MPs to the folly of RDR. By the way, I’m not saying that better qualification are not needed, rather that advice available to all is.

  12. The first thing that came into my head after reading this article was the line “forgive them father as they know not what they do”

    I am not a religious person and the FSA will get no such forgivness from me.

    Woodall’s speach in my view say’s it all, they have’nt got a clue how to pitch RDR to the general public or indeed IFA’s, they will just let the sh1t hit the fan after they have moved to better jobs that they have secured, and let the ones left behind to balance the accounts and sweep up the mess.

    Nic you have said as much yourself in your appraisal of the leaflet they have printed and I have yet to hear anyone explain to me what RDR Retail Distribution Review accually means ? has anyone mentioned this to a client and they have said “oh yes that is ……….

  13. On further reflection and after consideration of the latest Banking Scandals news, I am disgusted that Nic & his ilk have allowed RDR to go unchallenged and on top of that they have not pilloried either the Banks for their miss selling pointing out that IFAs didn’t and had an excellent relationship with their clients OR pushed like Paxman the FSA in their soft touch bank regulation of their vested interest friends. Shame on you Nic!!!!!! Shame on you.

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm