IFP chief: RDR stallers have got 'heads in the sand'

RDR deniers need to "get their heads out of the sand" and get on with meeting the FSA's new professionalism and remuneration rules, IFP chief executive Nick Cann said today.

Speaking at Professional Adviser's final fund5live conference in central London, Cann said the UK's 25,000 IFAs operate in the most heavily-regulated market in the world.

But he urged them to embrace the transition to a fee-based regime and get on with meeting the new minimum qualification requirements, if they have not begun to do so already.

"Worryingly, people have their heads in the sand hoping these issues will go away - they will not," Cann (pictured) said.

"In terms of Level 4 qualifications, we need to get on and make sure we are still able to be in business."

Cann expressed sympathy for advisers operating in the face of the FSA's increasingly-intrusive regulatory approach.

He said there remains a "lack of clarity" from the FSA over certain issues and argued the recent consultation papers left many questions still unanswered.

But he said the industry is losing advisers not prepared to meet RDR requirements and urged IFAs to not to "moan and complain" about examinations, but find the most suitable route to Level 4.

He acknowledged fee-charging represents a challenge.

"Businesses tell me this will require a good three-year transition time in terms of getting the teams, process and confidence - a lot of work and effort is needed," he said.

"If that is alien to you, then find other businesses doing it and look how they are dealing with issues which are giving you grief."

Cann said the industry has seen some "spectacular failures" in managing growth over the last five years as firms have prioritised turnover at the expense of profit.

"For too long, larger players have been driven by turnover and would not recognise profit if they saw it."

Other companies, he said, need to change their business models in order to encourage advisers to stay longer.

Looking back on the last few years of the adviser industry, Cann said the focus had perhaps shifted too heavily towards the technical ability of advisers in terms of product know-how at the expense of life planning and time spent with clients.

"But now, maybe we are seeing the reintroduction of what is important and a re-focus on the client as products themselves have become less important."

He said the rise of the paraplanner - a "must have" for any adviser firm - has enabled IFAs to spend more time with clients.