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Redefine time is positive part of RDR

One of the many things I have discovered after more than 20 years at the coalface of journalism is that issues us scribes get excited about do not necessarily trigger the same level of enthusiasm among readers. After a while, they stop wanting to read about them in enormous detail.

A classic example of what I mean is famine in Africa. Today, at least 25 years after reports of starving children in Ethiopia appeared, there is a certain sense of weariness among people, even those who want to help. There is even an expression for it – compassion fatigue.

My guess is that a similar set of emotions is beginning to take hold in relation to the retail distribution review. In that sense, it is a shame that Aifa’s last-minute contribution to the debate – its so-called “RDR manifesto” – is unlikely to receive the attention it deserves beyond a few fed-up financial advisers agreeing with many of its sentiments.

My own professional interest here is less to do with its timing but in the contents of the submission itself. It strikes me, again, that what Aifa is doing is playing to the IFA public gallery.

For many months, Aifa had very little to say publicly about the higher educational standards demanded by the RDR. I have been to and spoken at several public meetings and conferences attended by leading Aifa members and this was never identified as a major issue.

Suddenly, having discovered that many IFAs, particularly those in their mid to late 50s, are unhappy over the demand that they must sit more exams, Aifa is now getting hot under the collar. Last week’s statement that “the FSA needs to reaffirm its RDR objectives, so that it can be held accountable for delivering them”, as Money Marketing’s Nicole Blackmore reports, is a sign of this.

So is its demand that “no good firm should be put out of business by arbitrary dates imposed by the regulator” or for work-based assessment and vocational training to be recognised as equivalent to qualifications. As I said last week, and as Alan Lakey himself is cleverly picking up on, there are two words that explain this turn of events. They are “Adviser” and “Alliance”.

Similarly, it is interesting to see that, by contrast, in another section of the IFA trade body establishment, the silence on this last-minute opposition to the RDR’s higher qualifications’ initiative has been deafening.

I am referring here to the CII and the PFS. Again, both bodies might well claim they have in the past come out strongly in support of ratcheted-up professional qualifications for advisers and there is no need to do so again.

Yet within the IFA trade press in particular but also on many websites, the debate over grandfathering and the deadline for reaching QCA level 4 has become intense in recent weeks. If so, the CII and PFS’s unwillingness to take part in a discussion in which they are uniquely qualified to contribute is telling.

It would be unfair for me to speak about the RDR without also pointing out one positive aspect of the whole process IFAs have been going through in the past two and a half years. For many, it has meant redefining what they do and how they do it.

In some cases, this follows many years of previous efforts to position themselves as highly professional client-centzred businesses. A classic example of this is Informed Choice chief executive Nick Bamford, whose firm has just launched the website uk, edited by his son Martin.

Nick’s proposition is simple: “…If some one wants to buy an Isa, a personal pension plan or a collective investment arrangement…advice is in the minority via the web but this is now beginning to change.

“So here is a view of one intermediary model…. It is a segmented offering where financial planning is provided either face to face or in comb-in- ation with an online approach. The firm then offers a website where the consumer at low cost, with whole of market choice can execute solutions identified for them.”

It has to be said that this is only one firm’s vision of what changes are likely in the next decade or two. Other readers will have entirely different business strategies.

My own view is that Brilliantwithmoney is a great concept but the fairly basic information it provides so far does not make execution-only transactions that much easier for prospective users. Just as well, as there are not links in any of the articles that would lead people to transact, a strange omission.

What Nick and Martin really need to provide is a site that delivers not just word-based content but the analytical tools which allow people to make the “Informed Choices” they need.

Still, it is early days yet: Brilliantwithmoney needs time to bed in and evolve as Nick and Martin learn more about their users and what they want. Certainly, as a trust-building exercise for the face-to-face part of the business, it is a very good start.

Ultimately, it is these micro decisions about how to take advisory businesses forward after the RDR that will determine the future of IFAs after 2012. It is a shame, in many ways, that some trade bodies’ final submissions to the FSA do not appear to recognise this.

Nic Cicutti can be contacted at


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There are 7 comments at the moment, we would love to hear your opinion too.

  1. Should it read?


    Bit too long?

  2. 20 years at the coalface Nic and you get quite dirty!

  3. We would be really pleased to hear from any grown ups with any constructive criticism based around facts not perceptions of our values.


  4. Nic is correct when he says that RDR is helping to focus advisers minds on how they should position their businesses. It is also true to say that the threat of RDR is causing advisers to move away from a dependency on short term income &, by offering a real ongoing service, replace it with ongoing fees, so making advisers businesses far more viable. However AIFA are right to point out the moral injustice, impracticality & damage to the publics future access to advice which will result from the RDR. AIFA & those that support their view are bringing balance to the debate which has not previously existed. The PFS which holds itself out to represent its members views of course does not. It represents the views of its parent, the CII, whose existence depends on its ability to sell us more education, more courses & more exams. As a patently vested interest the PFS/CIIs should be ignored. it is surely time for some subtlety in moving forward the standards of financial advice.

  5. Nick Bamford

    2 facts – I have a BA (hons) in Business Studies, a post grad diploma from Lancaster, an MBA from New York and an MS from Illinois – none of which the FSA will allow as these qualifications were obtained more than 10 years ago. Next time you see your GP or dentist please ask when he or she qualified.

    1 opinion. I don’t believe that 95% of the existing work done requires higher qualifications. Most “advisers” sell product and fairly simple product at that. The FSA would be better advised to regulate the products and forget all about regulating the Sales/advice

    2nd Opinion. The remaining 5% who do give complex Independent Advice should be qualified to Q level 6 minimum. They must be whole of market and genuinely fee based i.e no off-setting nonsense or commission/ fees via wrap.

  6. Embarrassing the uselss journalist team 7th November 2009 at 5:34 pm

    Who gives a stuff what Ciccuti says anyway?

  7. 1 The Bamfords do a very good good of presenting themselves & what they do.

    2 The current qualifications levels for financial advice are ludicrously low. Most IFAs have been trained to sell from their days working for the Pru, CIS etc but have less idea how to put together & run a decent investment strategy.

    3 The PFS/CII muust be making an enormous amount of money from advisers taking (& failing) the Diploma exams.

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