The opposite has been the case and the RDR (if it comes about) offers a fantastic opportunity for the professional IFA but big problems for banks and big conglomerations of multi-tied sales advisers (pseudo IFAs). It clearly signals that independent advice is key for the consumer.
The Conservatives clearly have a different view as to whether the FSA has been effective. In terms of whether the FSA should be pushing it now or not is, I think, academic. The main reason for the RDR was to encourage greater savings, which should also be the main purpose of any future regulator and would be a good measurement of a regulator’s effectiveness, for example, the ratio of saving versus borrowing, rather than some vague mission statements or principles that no one can obviously measure, which means you are regulated by opinion, not by hard facts.
IFAs should simply ensure they are focused on delivering professional service to their clients and are moving their reward systems towards a recurring-income model. There are much bigger external influences driving the market than RDR and those that get their business model right will have a fantastic future. IFAs are in a great position and should make the most of it.
David HarrisonManaging partner, True Potential