What Stephen Gay thinks about the RDR

In a roundtable event hosted by IFAonline last year, Stephen Gay, the new director general at AIFA, gave his views on adviser charging, independence and the RDR timetable...

At the time of the event, Gay was director of distribution development, at Aviva.

Stephen Gay on...

RDR deadline

"It is all very well for big product providers to throw money and resources at RDR but can intermediaries make the 2012 deadline to get their systems up to scratch?"

Independent v Restricted

"The first aspect of that is how many advisers will still be in the market after 2012, and there are lots of different estimates about that. Research we have done says 25.5% of advisers said that they will be leaving the industry.

"Some of those who are going to remain will say: ‘I give a really good service to my customers, I do not think I need the extra hurdles required to be independent. So I will continue to operate as I am, as an almost IFA but operating under a restricted banner and my customers will be perfectly happy with that.

"Others will move to the new hurdle. Some of them perhaps will say, "A lot of it depends on the FSA's bandwidth to regulate this and I will continue as I am until such time as I am told to stop."

CAR on protection

"I think the FSA's reason for wanting to do this is because they believe protection is substitutable by the adviser for a savings product.

"In other words, they fear that protection would be a route around the RDR for those advisers who do not really want to take part in improving standards and adopting adviser charging. I think that hypothesis has not been proved and, intuitively, I do not think it would stand up."