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Adviser Alliance will lobby the Office of Fair Trading (OFT) to take up the anti-RDR cause on competition grounds.
Founder Alan Lakey (pictured) says the RDR will result in a "massive reduction" in competition within financial services and argues the OFT therefore has a statutory duty to make formal representation to the Competition Commission (CC).
According to Lakey, the ban on commission and expected drop in adviser numbers post-RDR will dramatically reduce competition.
Furthermore, he says RDR-driven changes are powering a growing tide of consolidation in the insurance sector which will punish consumers by limiting choice.
Lakey says profit margins on investment, pension and life insurance products in the UK are among the lowest in Europe and companies are burdened by too much regulation.
"Is it any wonder that insurance giants are looking to leave the UK," he says. "We are talking about a massive reduction in competition driven by RDR changes."
"We might be left with three or four consumers - this is not competition, this is a cartel."
Lakey, partner at Highclere, says he will lobby the OFT to present the anti-RDR case to the CC. He also reveals the OFT has already asked him to make representations explaining how the RDR will be detrimental to competition.
"If they are fulfilling their statutory function they are obliged to refer the matter to the CC," he says. "They have been vigorous in moaning about bank charges but are missing a trick because the RDR will seriously reduce competition. This is a big issue they need to address."
But the retrospective nature of the OFT's actions could present a stumbling block.
"The OFT tells me because the RDR will not be in place until 2013, they cannot do anything in advance, but they will be able to after 2013 - when it is too late."
According to Lakey, the OFT have held several meeting with the FSA over the past two-and-a-half years in which the RDR was discussed.
Comments
RDR will not go away!
IFAs should focus their efforts on getting ready for RDR rather than fighting it. It would be easier, require less negative energy and cost significantly less too.
Posted by: The Dark Horse
All around the houses
I love Alan Lakey he reminds me of one of the Curtain Twitchers, local Neighbourhood Watch members that are always looking out of the windows, writing to the council, raising hell at committee meetings and achieving very little. Of course I fully understand the concerns, shafted again by yet another regulator. We have been here before, and I am sure we will be again. Simple facts are no one is coming to save us, no White Knight, not even Alan can save us. Which is shame. The only solution is to accept it and of course move on. Your clients need you. If IFA's don't survive then all they have left is the pretty low quality stuff in the rest of the high street. Come on guy's get real, get qualified or get out, stop hoping for change your life and mine is too short. You know the regulator is ceasing to function when you see the kind of stuff they are pushing out. There's work to be done Richard Smith IFA and Tech Consultant http://www.theinternetconsultancy.com
Posted by: Richard Smith
IFA and history
The commission ban will eliminate IFAs, no question about that. The only hope is for the EU to prevent the UK from acting alone.
Posted by: Ken Durkin
Peering Out
Richard, whilst squinting through my office net curtains I couldn't help but reflect on the three types of adviser/support person that exists in this industry. There is the RDR flag waver who generally bases his opinion around the fact that his/her existing business model happens to fit the RDR template and is likely to be advanced by the proposals. Then there is the fence-sitter who sees benefits on either side and possibly believes that nothing can be achieved and, as a result, achieves nothing. The third type is he or she who fundamentally believes that the RDR proposals will destroy an already faltering industry. How much would ever have been achieved historically had every individual sat back and said, "I can't change things, so I'll do nothing". There much bad and plenty good about this industry yet the RDR proposals fail in reducing the bad and fail yet again in promoting the good. We all know that th nanny-state mentaility serves to reduce individual responsibility yet the RDR encourages this thought process. Anybody who feels as i do should join with us at Adviser Alliance (www.adviseralliance.co.uk) to make a difference.
Posted by: Alan Lakey
Qualify or get out?
It's not as simple as "qualify or get out"! Everybody was qualified and then authorised to conduct business and create businesses which ultimately created income/tax/jobs but the goalposts have moved during the game. There are so many qualified graduates chasing jobs (70:1 ratio)yet the FSA want to force IFA's out work by virtue of qualification in a reverse scenario. This industry is responsible for 9% of UK GDP yet it is under attack. I believe in the requirement to constantly update knowledge and perhaps take exams but not at the expense of livelihoods. Before making such sweeping statements Mr Smith,families of harworking IFA's are at risk. On the subject of commission, the option should remain evidenced by 86% of my clients in a recent survey.
Posted by: Peter Taylor
Fight or Flight
All that is needed for evil to flourish is for good men to do nothing. The FSA is certainly an evil organisation. Good on you Alan
Posted by: lol
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All because the FSA don't listen
2 main points which are wrong and barmy. The first point is why IFAs are having to re-qualify and take more examinations to stay in a job which we have been practicing successfully for years! Why do we have to take more exams for something we are already are qualified and experienced in? Yet the regulators don't have to have any qualfications to regulate! Also on a second main point the RDR proposes that for IFAs to continue trading from 2013 we must be fee based only and IFAs will not be allowed to accept commissions from providers. This is regardless of the customer’s view. This is puzzling. Why is the consumer not given a choice? Fee or commission route?
Posted by: paolo standerwick