He said the RDR addresses the three key requirements. “Professionalism comes down to three things. One is the absence of conflicts of interest and the model we have been operating in our industry for generations has had inherent conflicts of interest.
“It is also about having a level of qualification that the public respects. Currently, the public believes already that advisers are and should be at degree level. That is far from the case and is something we need to address. The third thing is that advisers need to be members of a professional body that has teeth.”
Which? principal policy adviser Dominic Lindley said that , from a consumer perspective, he is “cautiously optimistic” about the RDR. He said: “Once you remove provider influence from remuneration, you remove some of the suspicions that consumers have about the true independence of advisers. There is an opportunity for truly independent advisers to move away from the transaction-based, sales-based process to one that is more about a holistic relationship with clients.”
Institute of Financial Planning chief executive Nick Cann said getting advisers and their businesses to go through the required cultural and business changes is “a huge challenge but the opportunities at the other end, both for the existing marketplace and new entrants, are significant”.
Prudential intermediated strategy director Russell Warwick said: “We have a lot of professional behaviour in the industry, but we do not have is consistency. We need consistent ethical standards across the industry.”