Cann says ‘jury out’ on firms’ ability to survive post-RDR

Advisers' ability to reach out to consumers will determine their fate post RDR, according to Institute of Financial Planning (IFP) chief executive Nick Cann.

Speaking to promote the launch of Financial Planning Week (21-27 November), Cann cited client feedback to a J.P. Morgan Wealth Management report outlining the reasons some consumers distrust the financial services industry.

He said IFAs and financial planners needed to reach out to consumers to dispel myths about the industry.

Those who failed to do so wouldn't make it, he said. "The jury's out on some firms' ability to survive in 2013."

Cann pointed to the Arch Cru and Keydata scandals as factors for consumer distrust of more complex financial advice - and the reason that "most clients are happy with straightforward investment".

"Every adviser will tell you they are client-led, but we know that isn't necessarily the case," he added.

Australia, which recently passed legislation similar to RDR in October, was an example of what could happen to the UK market, he added.

Younger Australians overwhelmingly favoured simplified advice, Cann said, but it was something that UK advisers "still struggled with". "I wouldn't pay for it", he added.

An IFP survey conducted for Financial Planning Week suggested 74% of consumers still made their own financial decisions without comprehensive planning. 58% still used price comparison websites, with 25% saying they saw no value in financial advice.

Cann said IFAs would not be able to fully serve the mass market post RDR "even if they wanted to". Refining their target market was more important, he added.