The RDR has failed to do a lot, by the regulator’s own admission. But there is much that it has achieved, not least creating an environment of higher expectation on a number of levels.
Higher professional standards have been accompanied by a new regulator who has stated it will devote a significant part of its budget to thematic reviews to influence improved standards.
At the same time clients and potential clients are better informed and over two-thirds of prospective clients now undertake some initial research before engagement with intermediaries. In these respects, the bar has been unquestionably raised.
Which is why we found it surprising that over a third of those interviewed for our Retirement (R)evolution research have not yet formally defined their service proposition. This group comprised a diverse bunch of advisory businesses, suggesting that firms of all shapes and sizes are still grappling with the new world dynamics, or at least are waiting/procrastinating/refining (delete as appropriate).
Here is a quick summary:
- 38 per cent have not yet formally defined their advice proposition
- 32 per cent have three tiers of service defined by AUM
- 24 per cent define service as driven by client preference
- 11 per cent only service clients with assets over £100,000
- 4 per cent are specialists
There is no right answer. But there is definitely a wrong one: that is (at this stage) having no clear answer at all.
Thought, consideration, flexibility and the ability to adapt and evolve the proposition are good things – a legitimate, “why?” is enough to change the world. But fear-induced inertia, especially when you know what you should do, is certainly not.
Having done what is required to be a legally operating entity in a post-RDR world, the challenges that remain are, unfortunately, the difficult ones.
But they are also the ones that will bring, once tackled, the greatest rewards.
We would all like to find easy solutions to our problems that take minimal time and effort and are guaranteed to work. Of course, the problems that lend themselves to these kind of solutions have already been solved (and more than likely imitated to death).
What we are left with are problems that will take a whole lot of effort, suck up resource and require a fair amount of bravery – your solution might not work.
But better to accept and confront these facts now, commit the resource needed, if that’s what is required, and the possible payback is worth the effort – then get on with it.
Many others are.