The big news in our industry over the last couple of weeks has been the Treasury select committee’s report on the retail distribution review and its recommendation that it should be delayed by 12 months. This started quite a debate, with the obvious people and organisations coming out with the usual comments.
I am glad the RDR is deemed important enough to receive such attention and I broadly welcome the comments of the committee but I do not think the report will alter the timeline or content of the RDR, nor do I think it should.
It would be easy for the FSA to use the TSC’s paper to buy itself more time. It has not. On the contrary, the FSA has shown itself to be completely committed to the initiative and the timescale and this is to be commended. Hector Sants has already said as much following a sternly worded letter from TSC chairman Andrew Tyrie.
I can see both sides of the argument but ultimately believe the deadline of 2012 should stay in place and that advisers should work, if they are not already, towards ensuring they are prepared for it, looking for support in getting there if necessary.
I have always felt the RDR should not be seen by IFAs as a set of challenges to overcome but rather as a host of opportunities for those firms able to accept and embrace the changes that are coming.
Those changes have been coming for years. All the RDR is really doing is formalising the process for those forward-thinking enough to have seen the inevitable and laying down the law for the others.
Now more than ever advisers have the opportunity to alter the relationships they have had with traditional product providers for so long and in doing so, take greater control of the value chain in which they play such an important part.
However, this can only happen effectively if they work together, pooling their expertise and assets for the benefit of their clients and their own businesses.
Paradigm has been working with partner firms for more than three years, helping them prepare for the change and ensuring they are all well on course to be ready come 2013. Paradigm, and many other firms like it, does not need the extra 12 months proposed by the TSC. In fact, the majority of those I have spoken to would feel let down if the delays proposed were introduced.
RDR is a fantastic opportunity for the advice market. Those who do not see it are simply fooling themselves and will pay the price when the day of reckoning finally arrives.
Paul Hogarth is founder of Paradigm Partners