As the deadline to meet the minimum qualifications set out by the RDR draws closer, it continues to come up against some resistance as many professionals remain unclear about how it can positively affect the industry. To find out more about people’s current perceptions of the RDR, we recently undertook industry research.
The results were very revealing as over 60 per cent of respondents, largely from retail banks, financial institutions or an IFA firm, who do not have QCF level four are training for it or are planning to train for it this year. It is interesting to see that so many professionals are working towards the requirements even though there is some public animosity towards the RDR.
Other results revealed that there are mixed opinions about whether the RDR will improve the credibility of advice, further highlighting a lack of clarity surrounding its benefits. The RDR will help the industry to become better respected and boost consumer confidence, positives which need to be communicated to all FAs.
A shrinking regional talent pool
The majority of survey respondents were based in London and the South-east, which is reflective of where much of the industry is based. Regions such as the Southwest, the North and the Midlands suffer from a lack of advisers and employers often struggle to recruit the professionals they need.
The industry needs to tackle this prior to the RDR, other-wise it could become further exaggerated as the big retail banks and corporates continue to dominate the industry due to their ability to support their employees with learning and development packages, which include structured training courses and study materials.
Smaller regional brokers or financial planning businesses need to be more prepared to embrace the RDR and provide study support. In addition, national comp-anies should consider re-launching their academies in the regions with shortages.
Staying for the long term
The ambivalent publicity that the RDR receives has created a perception that many professionals may consider other career options rather than training.
If this is the case, employers must address this and do what they can to encourage and support training for advisers, otherwise they may face a problematic skills gap in the market.
However, our results show that the large majority are currently studying or planning to start studying within the year, which indicates that many will stay working in the industry.
When asked whether respondents feel the requirement for QCF level four will prompt advisers to leave the industry, 79 per cent felt it would. This highlights a gap between the perception that people are leaving and the reality that most are planning to stay.
For those who decide to move jobs, there are various options they can consider. For example, they could move into a non-sales function such as a technical back-office support position. However, this is often easier said then done as the skill set needed for this type of role is very different from the skill set an adviser would need as the job requirements are very different. A role as an adviser is very sales-oriented and therefore a technical role does not always bode well. An adviser may want to cons-ider a different sales-related role outside financial services if they decide not to train for their QCF level four.
Current impact on staffing
The RDR has meant employers are being increasingly selective about their hires and are keen only to recruit qualified financial advisers who have made a start with their diploma in financial planning, or who are planning to do so.
Organisations are reluctant to lose their most highly skilled advisers and are doing every-thing they can to retain them, for example, sponsoring their studies towards a diploma and tying them in contractually in some instances.
Our survey results reflect this as just under half of resp-ondents say their employers are covering the costs of training, something which over 90 per cent of those asked believed should happen. It seems that only those who are self-employed have to fund it themselves.
A bright future
The RDR will improve both the professional and ethical reputation of the industry. This should also create more movement in the job market as many professionals start to consider their career options.
Employers may need to look at how they can retain talent post-RDR to avoid future prob-lems. For example, some organisations may need to imple-ment benefit schemes, which include a salary increase once qualified or bonuses for those who stay with their employer.
The increased reputation will also help make the prof-ession more attractive to future talent. Another key ben-efit of the RDR is an increase in consumer confidence when investing, something which has rapidly decreased over the last couple of years.