If we think back only a few years, distribution was fairly straightforward and could be split into two distinct categories – product providers sold direct to the public via their direct salesforces or via IFAs and investment houses sold via IFAs and direct, usually utilising off-the-page ads.
Things slowly changed, with IFAs having their own broker bonds and Skandia starting to sell other companies’ products although this evolutionary development started to accelerate with the development of white labelling and strange, often Antipodean or American imports such as fund supermarkets and multi-managers. With time, increased computing power and particularly the growth of the internet, all these new advan-ces became accepted but they did not really disturb the usual distribution models too much.
Recently, however, all this has changed with the advent of RDR and the coming together of a number of separate, unrelated strands into the marketplace.
For those living in the proverbial cave, the RDR is merely the latest change since the Financial Services Act in 1986 – commission disclosure in 1993, depolarisation in 2005, a move by the FSA from rules to principles, the introduction of treating customers fairly and finally the retail distribution review.
This was launched by the FSA in the balmy economic conditions of 2006 as a response to what they perceived to be recurring problems in the retail financial services market such as product and provider bias, churning of products, lack of access to financial advice and a perc-eived lack of professionalism.
The latter has meant that grandfathering is no longer allowed although current industry qualifications will definitely be taken into account under the FSA’s no regrets policy so it is still worth your time taking diploma-level qualifications.
In the considerably choppier economic conditions of 2009, all the above now means that whatever money the investing public has, there are potentially a similar range of eventual destinations – pensions and investments that have not altered too much although there is a bewildering array of routes to get there.
The complexities of investment/asset allocation mean that all advisers need to be able to use the tools that the packagers have on offer so as to be able to offer the levels of holistic aftercare and service that customers now demand. Ironically, because there is more information available, the ability to sift through that glut of data becomes ever more important and this means that advisers need to become much better qualified – another RDR requirement.
For both potential and current advisers, there has never been a more important time to get qualified. We are in an employer’s market and they are being driven to only recruit the best so as to be able to both obtain and retain business.
Harris Keillar is managing director of Keillar Resourcing