It is quite clear though that the regulator would like to change things from that particular date and although they might allow some leeway, that leeway is probably going to come at the expense, or should I say cost, of additional supervision.
The sector will undoubtedly change and as David Bowie once said: “We can’t change time” but time will actually be the most impactful element of all that is proposed.
The Government without doubt wants to ensure that the general public are better educated on a financial basis and this will take a significant rise in the level of financial capability from the current level at which it exists.
Individuals not only need to want to be in receipt of this kind of knowledge, they need to see the benefit of getting themselves more involved and understanding more. This means creating a culture of savings in the UK, possibly easier to do following the credit crunch, and this opportunity should not be lost.
Financial capability is important but you need to explain to people why it is necessary and to currently have a discussion on emphasising consumer responsibility when financial capability has not been dealt with is quite inappropriate.
You cannot ask people to take responsibility for something that they do not understand. This would be a complete anathema and certainly against “treating customers fairly”.
Indeed, the use of the word “customers” is probably not conducive to long-term relationships (which if you read the recent paper from the FSA is so important when you are switching pensions).
I would therefore suggest with respect that TCF should either have a totally new name or be referred to as “treating clients fairly”.
Perhaps for the sales-oriented culture it could be changed to “treating punters fairly”. In addition to which the web is seen as the answer to all servicing issues. It may solve some problems but it does not address the issue that most websites carry a reading age of 18 where the people that we are trying to encourage to save have a reading age which aver- ages between eight and 10.
Another element which is going to push things forward is service. I think it will be the defining point in our sector but it will be the kind of service which helps people, particularly with the culture shift towards saving as people realise that spending or sending before they have the money is not a particularly sensible way to go about things.
Everybody needs some help but initially what they need is good quality low-cost products for things such as sickness cover and indeed premature death for someone who has a large family or even average family size.
Customer agreed remuneration will determine those who can articulate what value they truly add. For some individuals and some firms this will be a very difficult hill to climb and unless you are in a position to clearly map out your processes, it is hard to see how you make that work.
Using ISO 22222 can help here and is to be recommended but only if you are using an outside consultancy after all plans have to be previously tested. This will be to no one’s advantage. It is no rehearsal. Any deferral of the RDR would be bad for the industry. We can all too easily take a breather and is this is something we need to avoid if we are to have an industry which has the trust and confidence of the public.
The trust in the banks has evaporated and we need to fill that vacuum. This is one opportunity that we cannot allow to get away. We can offer a service that they have oft promised but rarely delivered.
With all this opportunity, we should not be balking at exams. We should be getting them out of the way and moving forward. As Bowie sang, we can’t stop change so let’s get busy, there is not an overabundance of time.
Rob Reid is managing director of Syndaxi Chartered Financial Planners