Openwork chief executive Mary-Anne McIntyre has revealed the firm has spent £15m preparing for the retail distribution review but is still calling for a one-year delay to ensure as many advisers as possible remain in the industry.
McIntyre, formerly chief operating officer at the network, was appointed chief executive in June, replacing Martin Davis who left to join Cofunds.
She says Openwork has been preparing for the RDR in an effort to ensure its members make the transition by 2013.
McIntyre says: “Over the last two years, we have spent £15m making sure our protection, mortgages and investment businesses and all our systems are integrated. The money we have spent on helping advisers transition their businesses is also rolled into that figure.”
To help the process, McIntyre thinks the FSA should delay the qualification deadline for 12 months to allow advisers extra time to get to QCF level four.
She says: “It is only 16 months until the RDR live date and I would like to see another year given to advisers to reach the required qualifications.”
McIntyre says there are still tied advisers who think they do not need to complete their QCF level four qualifications.
She says: “We have seen this issue come up at our panel meetings, where some advisers think because they are not whole of market they do not need to adhere to the requirements of the RDR. Openwork is really stepping up its communication on this in the next 16 months.”
By January 2013, McIntyre says Openwork expects to lose 15 per cent of its adviser population due to the RDR but she expects some of those advisers will move to other parts of the business such as protection.
The network has yet to come up with a proposition to service the resulting orphan clients, although McIntyre says it is working with parent company Zurich to find a solution.
In September, Openwork announced it was acquiring 2plan Wealth Management in a bid to build whole-of-market IFA capability ahead of the RDR.
The deal saw Openwork buy 100 per cent of 2Plan, which has 205 advisers. As a result of the acquisition, Openwork now has a single-tie, multi-tie and IFA offering with a total of 2,300 advisers.
McIntyre says the firm is considering launching a national proposition to provide more choice to advisers.
She says: “We have added our IFA capability through 2Plan and what we are looking to do now is add a national proposition within the next 12 months.”
McIntyre says Openwork would like to have one back-office solution to power all its offerings but faces a challenge to make this a reality.
Last month, Money Marketing revealed a former Openwork member is considering legal action against the network for breach of contract after he and another adviser were dismissed for promoting Ucis funds.
Openwork says the two ad-visers were promoting the Ucis fund without the required authority.
McIntyre defends Openwork’s decision and says it will take a hard line with any adviser who promotes funds under its name without permission.
She says: “As a network we expect people to comply with our rules. These decisions are not taken lightly but you have to draw a line and when people cross it, we have to take action.”
The firm also recently dismissed several mortgage advisers for failing to verify income.