Zurich chief growth officer David Etherington says the scale and impact of the retail distribution review on advisers is like being “asked to climb Everest the day after going down on the Titanic”.
Speaking in a panel debate at last week’s Sesame Symposium, Etherington said he is concerned with the way that new regulation is created.
He said: “If you just actually sank on the Titanic, which is what the industry has done in coming through the financial crisis, being asked to run up Everest the next day is a bit bizarre.
“We have lobbied aggressively with politicians and lords and there is a lot of support for helping the industry. I will not rest until we see more relaxation in what is being asked of us by 2012.”
The panel was responding to a question from DPB Independent Financial Services principle David Barnett, who asked if the panel will support MPs in the forthcoming debate on the RDR.
Partnership chief executive Steve Groves said the costs of the RDR could not be justified but that change is unlikely. He said: “My view is you cannot justify the spend and the incremental costs of some of the requirements but I have to say I think it is a battle we have already lost.”
Skandia chief executive Peter Mann said that the chances of the Government doing “a volte face” was relatively small and a lack of und-erstanding means they are unlikely to move on qualifications.
He said: “We need to get them to understand that the correlation they think exists between qualification and good advice is not a direct correlation. What drives good advice is intent.”
Scottish Widows’ intermediaries director Simon Massey said the RDR would enable advisers to stand “shoulder to shoulder” with professions such as solicitors and accountants.
He said: “I think we often want to be seen and feel that we are a profession and stand shoulder to shoulder with our solicitor and accountant friends but regrettably the facts do not stack up against that. For me, professionalism has three components – experience, qualifications and ethics. We are found wanting on the qualifications’ aspect and if we do not deal with that we will always be seen as the poor man in those relationships.”
Barnett called on the panel to publicise the issue so that people can lobby their MPs ahead of the debate.
He said: “You are treating this as a fait accompli, which it certainly is not. The problem is none of you are getting this into the public domain.”
Massey said: “You do not win arguments by exposing people in newspaper headlines, you win arguments by cogent, decent arguments behind the scenes. It may appear that we are rolling along with this but I can assure you, from my perspective and I am sure the same is true with other members of the panel, that there is a lot going on behind the scenes.”
Etherington said consolidation will become more prevalent within the IFA sector but that technology offers a way into the mass market.
He said: “It will become more prevalent because of the capital and regulatory pressures on advice and the investment required to provide the infrastructure and models to transact safely. There are huge opportunities for people who have advised well in the past, steering clients through the financial crisis to look at technology as a means of entering the mass market.”
Groves said: “The key is how you segment between the people you spend lots and lots of face time with, versus the people you serve using lots of technology and limited face time.”