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Pru: Who should be responsible for RDR consumer awareness?

The issue of who should bear the burden of educating consumers about the RDR is fast becoming one of the most hotly debated topics of the year.  

There has certainly been enough research carried out to conclude that many advisers believe that the FSA and/or government should take on this responsibility, but is it really right for the industry to look to a regulatory body like the FSA to lead this work? Also, what role should there be for organisations like the Money Advice Service?

The timing of communication to consumers is also likely to be a key issue, with the question being how far ahead of R-Day should any communication begin?

My view is that if messages were sent out now, by January 1, 2013, most consumers will have forgotten the detail or even the messages entirely, so that’s why we believe that the best time to undertake any broad consumer education would be later this year and for it to continue into Q1 and possibly Q2 next year, as it’s important to recognise that, for a typical customer, R-day is not directly relevant. The first time post R-day that they engage with their adviser is the key date when the impact of RDR will be tangible to them.

But the point that I feel is most significant when it comes to the debate about communication to consumers is for the industry, and specifically advisers, to be careful about what they wish for in this area. Does an adviser really want their client to hear about the ins and outs of the RDR from a regulator? Does this put the adviser on the front or back foot? I think when advisers think this through most are likely to want their clients to hear about RDR from them, and for it to happen at the same time as the conversation about how they propose to work together in the future. This approach will help put the adviser on the front foot with their client, and to build stronger and longer relationships.

Russell Warwick is distribution change director at Prudential



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There are 11 comments at the moment, we would love to hear your opinion too.

  1. I speak to people who to this day have never heard of FIMBRA, LAUTRO, PIA or FSA so what chance do they have of having any interest in the RDR?

  2. Agreed Evan.
    I spoke to a bank teller about two years ago who had never heard of TCF. I kid you not.

  3. Is it any wonder people switch off when we talk in jargon? If we want people to listen and to understand the message “keep it real” – a phrase that seems to be coming back in fashion.

    Do I care what RDR means? No. Do I care what the cost of advice may be moving into 2013. Yes. So if you want my attention dont call it RDR and talk to me as a human not a delegate at a conference for FSA pen pushers.

  4. Whats is “RDR” for a start ?

    Retail Distribution Review !!!

    Like most FSA crap and propagander, what exactly does it mean ? I’ve not worked it out yet what chance to the general public have.

    3 common words strung together that make no sense.

  5. Simon Webster 23rd May 2012 at 5:25 pm

    No one (outside the profession) cares about RDR.

    Consumers only need to know 3 things:

    1. The status of their adviser: restricted or independent. in our view independence is like pregnancy – you either are or you aren’t…
    2. What will it cost?
    3. What will I get?

    At client macro level RDR has really changed very little which of course is why the whole thing is such a joke!

  6. Weird names, longer ones all designed to help punters as is all the other silliness. I saw an old client agreement of mine from 1999 the other day. It was on one side of A4. Mine is now 6 pages long. The difference? They used to be read in 1999!

  7. I thought that the FSA had already carried out research, which indicated that the public were in favour of RDR? Or putting it more plainly, the public preferred to pay ‘up front’ for advice, and did’nt want a choice of paying the adviser commission?

    Am I wrong?

  8. RDR – about how products are retailed without a wholesale price. But let me put it this way: If product providers think I’m going to spend any time at all researching the products they have designed for the consumer, and then marketing and distributing their products to the consumer FREE OF CHARGE to the product provider – think again! However, it appears there are plenty of gullible IFAs who think it’s a good idea! Let’s see how long they last!

  9. Simon Webster you are absolutely correct, so moneysupermarket !!(lol)

    Clients need us, we need them, it is up to us to establish a symbiotic relationship going forward and ensure that we not only add value, but we endeavour to quantify it.

    Example – Term Assurance
    IFA advice – protection from mis selling under FSA regs

    Buying direct – no advice no protection.


    I am dealing with a client currently whose husband died in tragic circumstances whilst they were seperated. When it came to a claim on the life assurance plans set up by the bank, it was then that she found out he had not paid his premiums on the standalone policy set up for mortgage protection.

    The BANK (nameless to protect the innocent) had advised and sold two individual Life and CI policies. Had they sold a joint life first event policy(normal advice process and cheaper premiums as they were still living together at that time) she would have been entitled to maintain the premiums and retain protection for the mortgage which at that time was in joint names.

    Now she has to go through the banks complaints procedure and then FOS because we all know banks never admit they got it wrong, they try to wear the consumer down.

    My client did this without my knowledge some years ago whent they remortgaged with their bank

    I cannot change the world, but I can influence my clients mind set and ensure they know who is looking after their interests.

  10. I hope this education of clients includes the news that some providers will switch off legacy commission on old style products and will not return this money to the client!

    One such provider is I believe Prudential?
    The other is Standard Life whose Broker Consultant admitted this to us yesterday.

    Treating Customers Fairly?

  11. The road to bankruptcy is paved with those who tried to educate the public.

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