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RDR Interim Report: Providers to raise professionalism game, says pi Financial

Pi Financial welcomes the new benchmark of diploma equivalent and the time to achieve it but says providers also need to raise their game.

Chief executive Tim Sutcliffe says: “I welcome the call for professionalism but I would also hope the FSA will look for product providers to become more professional in terms of service and their products. I would hope that the leading providers will also make the quantum leap that advisers are being asked to accomplish.”

He welcomes the FSA’s decisions not to allow individual vested interests to supersede the RDR’s initial objective of clarifying the distribution landscape for consumers.

While he says the industry has long-since recognised that in order for advisers to be independent they must be ‘whole of market’, the FSA’s support on this matter is welcome.

He says: “Clients should now have no doubts that an IFA works on their behalf whereas the sales person is working for the company. Clearly banks and providers with tied sales forces will have much to say but if the regulator and Treasury stand firm they will have made a clear statement that the client’s interests are paramount.

Pi financial also welcomes the acknowledgement that CAR is not the solution to remuneration.

It says the decision that a mixed economy model with the client at the forefront is the preferred way.

Sutcliffe says: “Most of the industry will applaud this choice, with product providers spared the high cost of implementing CAR. Advisers will remain empowered to negotiate with product providers for better terms on behalf of clients.”

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