View more on these topics

RDR offers chance to rebuild trust

With just over a year to go to the implementation of the RDR, there is still so much to do. Last week’s announcement of HSBC’s fine as a result of inappropriate advice provided by its subsidiary NHFA demonstrates why so much of this change is necessary. It also highlights the huge cultural change that some organisations and individuals have to go through to meet the challenges ahead.

Some see the RDR as a need to pass exams, sign up for a statement of professional standing and meet the minimum requirements of CPD as set out in the regulations. It is all seen as a process of compliance rather than a way of doing business and behaving like a professional.

Unfortunately, many will sign up to a code of ethics without reading it or indeed applying it to their business. Many are probably members of a professional body, yet are unable to apply the current code because of the internal procedures within their firms, which throws up further challenges. Regulation and commercial override has led some bigger organisations to fall foul of the need to do the best for the client, even though the process itself might have been compliant with the regulations.

The new environment provides the ideal opportunity for us to put the clients’ needs first again. Through this fiduciary responsibility, we can improve recognition of our profession and trust in the sector.

When properly applied, the financial planning process must put clients’ needs at the heart of the relationship and service. It relegates product selection from the forefront of the conversation to the tail end of the process, becoming just a vehicle to help the client achieve their goals. Research shows that the client does not attach strong value to the advice given on product selection. Similarly, the vast amount of work that goes into compliance, research and plan preparation is just a means to an end. What clients really want and value is a professional business to help them sort out their affairs and make effective plans for the future.

They value the relationship and the ability to trust the business and individuals they work with to ensure that they are on track to achieve their goals and objectives in life.

Delivering a financial planning service is far more than passing level four exams, just as customer-agreed remuneration is far more than just having a tariff to present. Similarly, selecting an accredited body for most is about far more than just getting an SPS.

From the accredited body, there should be far more engagement than simply ticking the boxes and issuing the statements. There is an opportunity to build a profession for those that are prepared to commit and to participate. Signing up to a code of ethics should mean far more than saying a process is compliant.

Next year, we will see a scramble by many to finish level four qualifications and an even bigger scramble to sort out proper gap-fill ahead of applying for SPSs. This will be alongside the panic that will set in to organise business processes to be ready for 2013. The IFP programme of events is tailored for both established and transitioning businesses.

Nick Cann is chief executive of the Institute of Financial Planning



Ian McKenna: Mobile technology can transform your business

As someone who has long advocated the mobile platform as a crucial channel for the future, I feel smartphones and tablets have the potential to transform many advisers’ relationship with technology. Historically, some advisers have not put technology at the heart of their businesses but almost every day I see examples of this changing and […]


Aifa calls for review of FSA life settlements move

Aifa is calling for a review into whether the closure of EEA Life Settlements Fund was a direct result of the FSA’s proposal to ban life settlement funds from being marketed to UK retail investors. The FSA published a guidance consultation on life settlements, or traded life policy investments, last month. The regulator branded TLPIs […]


FSA begins Arch cru adviser investigation

The FSA is carrying out an investigation into advisers who recommended Arch cru funds and has written to firms asking for further details about their Arch cru sales. In a letter to advisers, sent yesterday and seen by Money Marketing, the regulator says it is looking into sales involving the CF Arch cru investment portfolio […]


Europe institutions clash over future of financial compensation schemes

The European Council is at odds with other European institutions over the funding model and maximum guaranteed compensation levels of the investor compensation scheme directive. The council says the maximum guaranteed level of compensation should be increased from the current €20,000 to €30,000, while the European Commission and the European Parliament say the new maximum […]


News and expert analysis straight to your inbox

Sign up


There is one comment at the moment, we would love to hear your opinion too.

  1. Q: RDR offers chance to rebuild trust


    All the evidence shows that the IFA is trusted by his/her clients. The suggestion that trust needs to be rebult is total tosh! If anyone needs to rebuild trust it is the idiots at Ivory Tower, Canary Wharf – Hector House!

    A recent Panacea Survey has created a regulatory firestorm. The survey claims to be the first “true” IFA consultation over RDR and the results promise to be a significant embarrassment to the FSA. The survey closes today at 5 pm but you can participate in it still at:

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm