Providers unprepared for post-RDR adviser charging models

Only half of product providers are ready to deal with all the various possible adviser charging models post-RDR, according to new research.

A survey by 1st Exchange & N4 and the Ideas Lab has assessed the current state of preparedness of life assurance companies and fund managers to cope with regulatory changes.

It  found the most pressing areas they need to focus on are system changes, FSA guidance and the need to get to grips with adviser charging.

Only half of the providers surveyed said they were prepared for all shapes and frequencies of adviser charging, with some assuming only limited options.

Meanwhile, only 25% can cater to performance-related fees, with none giving the freedom to select a benchmark of the firm's own choice.

However, 92% said they have confirmed and signed off on a strategy that takes them up to and beyond 2013, although 30% said some elements are still 'work in progress'.

While he accepts some confusion will remain until guidelines for areas such as platforms are set in stone, Robert Reid of the Ideas Lab is urging providers to move forward together.

He says: "Although it is clear that many providers have been on the front foot in preparing for the changes, not enough is being done by the market as a whole to help advisers meet next year's deadline".

"Maybe now is the time for providers to make some collective decisions, which would ultimately be of benefit to themselves, intermediaries and consumers."

Paul Yates, strategy and business development director at 1st The Exchange, insists providers need to be ready ahead of the 2013 deadline in order to cater to the needs of advisers.

He says: "It is important that the expertise and resource that is available within the industry is utilised before it is too late

"Advisers are going to have to put more effort into their reports for clients and they are going to have to free themselves from other burdens so they want providers' systems to be fully optimised."