The first two RDR papers might have used exams, capital adequacy, PI and customeragreed remuneration to push for so much change that the IFA sector broke. Now advisers are confronted with a limited reworking of remuneration and an increase in exam requirements over time but it is an achievable increase. There will be disagreements over detail but IFAs should allow themselves a smile.
Money Marketing has never been an advocate of exams for exams’ sake but we believe that, when integrated into an advice business, qualifications and professional development are of great benefit to adviser and client.
Money Marketing has also never been inherently opposed to the commission model for financial services. We have sympathy for arguments around GPPs, where thin margins and personal account uncertainty have stymied access to advice already. We also remind the market of David Harrison’s warnings last year that you could not apply a fee model to any sort of prospecting for new business.
But for IFAs, we still believe that a mix of income streams is best for your business, including a higher proportion of trail and fees. IFAs should not be too gleeful at the misfortune of others. It is now for the multi-ties to make their case, particularly about transparency, and any claim to be called advisers.
As for a bank fightback, it will be a mighty one but we contend that the first papers were bank-biased. It has not swung too far in the other direction. The bias has simply been corrected. Aifa won the argument because it was right, not because it was made by a powerful trade body.
The FSA must resist the big banks’ sabre-rattling, although the din may be deafening. As for life offices, they blamed everything on advisers first time round. Now they should accept their share of the blame for some problems and try and work with advisers to set them straight rather than trying to get the regulator to beat up advisers for them.
Finally, we promise readers that we will stay vigilant until the final paper appears. Roll on, October.