Where am I? 
Home Better Business Regulation RDR
Existing financial planners may need to re-think their client propositions as the RDR's drive for professionalism closes the gap between them and traditional advisers, threesixty says.
The support services provider says the RDR could rid financial planners of their unique selling points (USPs) as all advice firms will have similar propositions, charging models and minimum qualifications.
According to threesixty partner David Ingram, planners need to prepare now to compete in a more uniform world as confidence in their practices will mean little if they do not factor in the practicalities of the changes.
He says: "At a surface level, the current range of financial planners, wealth managers, whatever you want to call the existing firms, are prepared for RDR.
"They have the qualifications, have been working on a fee basis for some time, and have clear client propositions.
"But do they recognise while these factors currently make them stand out from the herd, all surviving IFA firms post-RDR will also possess those characteristics?"
Substantially reconsidering their customer offering could be a way to regain their USP going forward, says Ingram: "Financial planners maybe RDR-ready but are they competitor ready?"
However, principal of Essex-based Woodruff Financial Planning, Dan Woodruff, maintains early adopters will still have the edge.
The Certified Financial Planner (CFP) and trained solicitor says early investments in qualifications and compliance will pay off when new and old-model advisers square up over the same territory in 2013.
For planners, the RDR is a "double-edged sword", he says: "A lot of competition will leave but the ones that are good will adapt."
Better distinctions between practices need to come from the Institute of Financial Planning (IFP), he says.
"The IFP needs to get their act together and define financial planning as a profession like chartered accountants have and like they do in the US.
"Right now if I say to customers, and even some industry people, that I am CFP they look at me like I am speaking a foreign language," he says.
Nick Cann, chief executive of the IFP, counters the body continues to lead the way in highlighting the professional status of planners.
But he adds that, in a changing industry, no-one can afford to rest on their laurels.
"Those who have led the way now have to consider what more they have to do to keep ahead of the bar, using new techniques and improving, changing who their clients are perhaps," he says.
"If you stand still you get overtaken. You have to look around to challenge what you are doing to stay ahead of the pack."
| Share | |
| Comment | RDR threat to financial planners' USPs - threesixty |
More rdr news
Email alerts
Recommended reading
Categories
Topics
Comments
IFAs future
An IFA is also a wealth planner, finance planner, etc. The various fancy names dreampt up by associations just to promote their own goals serve only to confuse the public! I do my job as an IFA prfessionally and have done complaint free for 25 years, but do not belong to a profession. Exams and subsequent letters after my name will not make me a better adviser so I will not be taking any more unless I decide I want or need to!
Posted by: Derek Vivian
Compulsion
As always the debate seems to forget that the existence of and work of lawyers, accountants etc is enshrined in the law of the land.Financial advice is optional and if it does not seem to represent value for money it is doomed.
Posted by: Phil Melville
Conundrum
Passing exams will not necessarily mean the FSA will trust you to conduct business. I recently applied for variation of permissions to add home reversion to our menu of services but was refused due to lack of experience. I have the compliance oversight function for my own Pracice,16 years experience,the relevant qualifications,no complaints and spent £250 which is non-refundable.Will the same apply on completion of JO4,JO5 and AF3 regarding pension transfers. JO4 could not even be deemed relevant CPD in relation to 99% of clients but many hours of study have to be completed whilst clients could benefit from this time.Knowledge and qualifications should be relevant and not exams for the sake of it. Let's improve in relevance and not test me on QROPs, HMRC sanction cahrges,the role of the scheme actuary etc.De-authorisation could affect many IFA's for failing irrelevant exams and the banning of commission will make the valuable advice I've given this week unaffordable. Furthermore,I read 22 solicitors were struck off last week for mortgage fraud and they were qualified professionals!
Posted by: Peter Taylor
Confusion reigns!
A Financial Planner's USP is only threatened by another Financial Planner adopting the same USP. Even then the threat is remote given that there are only 1100 Certified Financial Planners in the UK. Financial Advisers upscaling their professionalism does not make them financial planners - unless they decide to build their business proposition around a financial planning service. What three sixty failed to point out is that financial planning is not a regulated activity and the FSA has no plans to regulate it. An aspiring financial planner only needs to meet the IFP's licence standards to call him/her self a Certified Financial Planner. It has little to do with the RDR. Financial advisers that do not yet meet RDR qualifications have enough on their plates without starting to take on an additional and non-regulated activity. If, when they have achieved the standards required by the RDR they decide to move to financial planning then the financial planning community will welcome them wholeheartedly, not see them as a threat. It will be quite some time before there are more financial planners around than the market can support.
Posted by: Mike S
Related articles
Most Read
Audio / Visual
With the industry's biggest fund managers, IFAonline welcomes you to the media centre.
This year we have 14 awards designed to mark out the very best products in a highly competitive and innovative market. This includes three new awards for 2011 to reflect the developments in this rapidly growing market: Best Dual/Multi-Index Product, Best Structured (Oeic) Fund and Best Structured Product Provider.
Events
Poll
|
|
Job search
Ifaonlinejobs will open the right investment career path for you. Search hundreds of vacancies on www.ifaonlinejobs.co.uk now
In Focus
Two months left before the ‘real RDR deadline’ – are you compliant with the required professional...
Viewpoints
At the start of one of busiest times of year it is easy to think about all the obvious things...
sponsored by
Blind Views
Is RDR a hallucinogenic drug? The gibberish that is spouted by apparently sensible people is staggering. Accountants & solicitors are qualified people and manage to present a whole range of USPs without too much trouble. Are 360 trying to imply that IFAs are too stupid to work out what they want to do? Or, are they recognising that the IFA adviser is going to be operating in a very small market - a market that can afford them - and a market that has in the past seen a high level of do-it-yourself. There is little difficulty in buying investments and protection and pensions, especially in an online world. Very few people would aspire to the do-it-yourself approach to accounts and the law. Add on the legislative requirement for certain accountancy and legal products, and there is real and commercial need for a high level of professionalism in those jobs. Would anyone suggest that there is the same imperatives in Financial Advice. Good financial advice is useful, sometimes very useful, but rarely is it an imperative. And only a small section of the market appears to require this. The poor can't afford us anyway. The very rich don't need the vast majority of our products and services. So it seems as though 360 implicitly accepts that the move to "greater professionalism" means a greater narrowing of the market, and therefore we need a jolly good story to persuade people that they will benefit from paying ever higher fees for our services. Yes, here's a good line - beat IHT - use an IFA and their fees will take you below the Threshold. Perhaps I over state the case but we can do without the claptrap coming out of the support services.
Posted by: Glen McKeown