Have you ever been in a situation where you have spent many months, even years, arguing in favour of a certain idea because you can see its potential long-term benefits?
During all that time, you have had to fend off hundreds of hostile comments from people telling you your opinions are rubbish. Then, slowly at first, the penny finally starts to drop among some readers.
I felt that way last week when I read Money Marketing’s comment that: “It has been a common misconception to suggest the RDR will play into the hand of the banks’ advice operations.
“But since it became clear that the FSA would operate much the same regulatory regime for independent and restricted advice, high-street banking institutions have had to think long and hard about whether they can operate in the bank advice arena.”
The result of all that hard thinking is that they are giving up before the retail distribution review has even come into force. Lo and behold, several banking institutions – notably Barclays and HSBC – are now saying they will not be going down the branch advice route or that they will scrap their tied advice arm.
For years now, I have argued that the application of the RDR equally between IFAs and financial institutions had the potential to impose such a burden on the banks that they would find it difficult to compete with independent financial advisers. Now it is finally happening.
Of course, as I said again and again, of vital importance for IFAs was the need to insist on equally high standards for so-called simplified advice.
In other words, there should be no quarter given to institutions that wanted to find an easier and more direct way of selling financial products – over the phone, for example – without ensuring full regulatory protection to consumers.
This is why I regularly waged battle against, say, the ABI’s attempts to persuade the FSA that simplified sales should be allowed.
Interestingly, when I did so, the number of supportive comments in Money Marketing were decidedly fewer than all the other times when I wrote in support of the RDR.
It is almost as if the visceral opposition so many IFAs feel for the RDR blinded them to its implications for other sections of the industry. Many readers of my column missed the fact that the RDR also has the potential to stop banks and life companies from walking in and eating their lunch.
That is not a given. IFAs need to be organised, professional and to offer a consistent message to clients. They must deliver superlative service at an affordable price, or at least be able to deliver genuine, transparent and quantifiable value over and above that potentially on offer from the big institutions.
None of those demands are impossible to meet, which is why I have always believed so many advisers have been missing the point in their hatred of all things RDR.
Even last week, as Money Marketing told us that “the changing face of bank advice should also be a great opportunity for IFA firms”, others insisted on comparing the RDR to the Titanic’s last journey, in which “frenzied small boat owners” (that is you, I believe) screamed loudly about “a massive iceberg” looming ahead. “You are heading straight for it, can’t you see it?”
If there are comparisons to be drawn between the Titanic and the RDR, they lie in the wilful inability to have enough lifeboats for both crew and passengers, to train the crew properly to carry out an evacuation, to even educate officers how many passengers could safely fit into each lifeboat, as a result of which many were launched half-full. In other words, there was no preparation for what might happen – and eventually did.
To continue with the Titanic analogy, it is almost as if someone decided that the ship was always going to crash into an iceberg and when it did, it was bound to sink. If that happened the lifeboats were completely useless, so there was little point in even having them or in taking part in drills of passengers and crew that might have helped save lives at the moment of impact.
If there is an analogy between the RDR and a nautical event, it is not the Titanic we should be looking to but Dunkirk in June 1940, where a serious military defeat risked turning into potentially cataclysmic collapse. Hundreds of thousands of Allied forces could have been captured but, instead, hundreds of small boats took part in a rescue operation, successfully lifting troops out of the water and bringing them back to England.
Although a significant part of the Dunkirk story is propaganda myth, its central story – that up to 1,000 small vessels and ships saved almost 340,000 British and French soldiers – is true.
In the run-up to January 2013, IFAs can either play the role of panic-stricken doom-mongers or they can get out there and help rescue thousands, perhaps millions of UK consumers. I know which role I would rather play.
Nic Cicutti can be contacted at firstname.lastname@example.org