There is a sense from advisers that the external perception of the industry is changing for the positive following RDR.
I’ll add that this isn’t based on empirical data and that’s there’s every chance that those we’ve been chatting to have happily inherited the brightside gene (apparently psychologists reckon seeing the glass as half full is hardwired into our genetic make-up with tests showing that a tendency to ignore negatives and dwell on the positives was strongly linked to a variation in a gene that controls serotonin, the brain’s main feel-good chemical).
I rather think it’s up to us what we focus on – and subsequently what we feel – but I’m no science buff so what do I know?
Anyway there’s the suggestion that this spike in positivity corresponds with the growing realisation that the firms which have ‘survived’ are altogether more professional.
That reassures clients (unsurprisingly) and helps throw off some of the more negative associations that the more unscrupulous (and dwindling) corners of the industry have helped build historically. Explicit pricing has also significantly improved transparency and made negotiating rates easier for consumers.
And looking at the hard data, certainly the firms that have been well prepared for RDR have seen some significant uptake in business. But this is still very much the beginning and the transformation we think we have seen may well just be the beginning.
Going forward the firms which offer better and distinct client service will ultimately succeed, which will come as no surprise given that in the new world it is no longer the product, but advice and planning which is being sold by advisers. This is why so-called ‘soft skills’ will become pivotal. It is EQ (emotional intelligence and everything it encompasses) that we rely on to deliver the hard knowledge and expertise and hence demonstrate value to clients. In this respect there is a very real concern around the pipeline of talent for the future. New graduates have academic ability but tend not have the other skills which are necessary to succeed in the industry.
The commercial reality is that successful businesses will charge where the customer sees the value rather than necessarily where the cost lies. Navigating this potential disconnect will present a major challenge to some, though not all. It will also likely increase the need for a greater level of specialisation in the industry making it more challenging for general practitioners to thrive without a killer service proposition.