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A poll of some 700 advisers - who were permitted to respond anonymously - has revealed what they really think about the Retail Distribution Review (RDR) and, crucially, what their clients think...
The research, released today, was conducted by online adviser community PanaceaIFA...
1) "They understand what the RDR is but can't see how the removal of commission will help them get advice."
2) "They think it is an over-reaction and that the current procedure is sufficient. They are very much against paying directly for advice."
3) "99% do not have a clue about RDR."
1) "My clients do not understand why they cannot have the choice of paying a fee, an hourly rate or paying on a commission basis."
2) "Many say they won't do it and will simply go back to the banks where advice will be restricted - they will have reduced choice."
3) "[This is a] daft question: they know they have to pay for my services now - the wording suggests they do not and this is what the RDR is trying to fix..."
1) "Most see [the distinction between independent and restricted] as a means for the banks to make bigger profits at the expense of the public."
2) "There will now be four different types of advisers [instead of two] this will certainly lead to confusion."
3) "They really do not care, as long as they get good advice and service at a reasonable cost."
1) "The FSA should take responsibility for this, it's the FSA's idea and it is constantly moving the goalposts."
2) "The government needs to run a massive TV and press campaign to tell the public that the FSA, an organisation that will be closed down, has decided that the public can no longer have a choice regarding how it pays for its financial advice."
3) "Advisers are perfectly able to inform clients of the facts surrounding RDR and the impact it will have on them, whether positive or negative."
1) "Most definitely. 95% of my clients would prefer the commission option."
2) "I strongly believe the paying public should be free to choose - that's not the job of the unelected pen pushers!"
3) "As long as full disclosure is the common rule for all advisers then the method is not important."
1) "There is no substitute for doing business with someone you know and trust."
2) "They value experience and face to face time."
3) "Value for money is vital. Qualifications are fairly important, but the vast majority of clients want investment and protection explained to them in an easy to understand fashion."
1) "They believe that I am adequately qualified and experienced."
2) "Raising the standard of professionalism is one of the few things the FSA
has got right in the recent past."
3) "A highly qualified adviser does not necessarily make a good adviser. Experience of sourcing and analysing suitable products is a part of learning too. Not having a certificate does not make me unqualified."
1) Two of my top three clients have decided they can "do it themselves"
to save the renewal commission, following the guidance I have given them in the past."
2) "Not so far, as we have taken the time to meet and 'educate' our clients."
3) "I expect to gain a larger slice of the market as older IFAs bail out in 2013 and
independent advice is in short supply."
1) "My business will not be ready because I cannot see any viable business
model post RDR."
2) "We are working hard to achieve this, but qualifications are not the only issue
fo us. The mixed messages and uncertainty created by the FSA is not helping."
3) "60% of my colleagues will leave the industry."
1) "Independent if possible, but may have to become restricted depending on the FSA's requirements for 'independent' advisers."
2) "Part of a network and I will abide by their decisions."
3) I cannot see how a sole trader can hope to be "independent" - he/she
cannot possibly have the time to accommodate the FSA requirements."
Take a look at PanaceaIFA's research HERE.
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It is no Panacea at all.
If you think this is research then you need to back to college. This is to research to what I am to cookery. Panacea - Universal Remedy - Magic Bullet. Less the Magic Bullet more the Magic Roundabout
Posted by: Harry Katz
RDR (again!)
These arguments are becoming tedious in the extreme! We went fee based nearly two years ago, developed our systems to cope with FSA rules changes and reporting requirements, changed our advisers' outlooks and training requirements, amended our business plans etc etc. How on earth IFAs expect to do all these things in 11 months is beyond me. It is not that the RDR has suddenly appeared is it? Don't get me wrong, there are many things wrong with the RDR but it will appear as promised! These arguments remind me of a quote: "There are three kinds of people in the world, the wills, the won'ts and the can'ts. The first accomplish everything; the second oppose everything; the third fail in everything." IFAs who have only just started the changes required are just beginning to see the problems and believe me they are not the ones raised here. Clients will pay fees, but advisers can't change old habits-that is the main problem. Software that is inflexible and product orientated is another. Contractual obligations move from provider to client-that causes problems with client agreements, adviser contracts and remuneration models. The list is endless-but instead of moaning and rolling over dead-why not contact people like us who may be able to help because we have been through it and WANT to help in order to give something back. You can e-mail me at kenh@fmsnet.co.uk Ken
Posted by: Ken Hayden
FSA Research - where is it?
The original FSA CP121 research based their views on fees on no less than 20 interviews. When the FSA Charles Rivers Review contradicted their (FSA) views it was ignored. The FSA produced a report based on some obscure Australia firm and you will recall the TSC considered the FSA evidence as all rather week. In fact pro RDR evidence is as obscure as the evidence for Weapons of Mass Destruction.
Posted by: Simon Mansell
Face up to it and stop kidding yourself
If your survey shows anything at all, it's what the delusional respondents would *like* their clients to believe. It also shows that many realise their clients won't want to pay as much for their advice as the providers have been paying to have them sell their products. If they believe that themselves then they're probably right. The answer isn't to stick their heads in the sand but to face up to it and make their advice good enough to be worth paying for. If they can't do that and no-one thinks the advice they're providing is worth paying for, then they're probably no good as an advisers and shouldn't be in the business. So move on and sell something else.
Posted by: PeterD
RDR Again
My previous comments here about whinging IFAs seems to have gone unpublished-presumably because I put my e-mail address in it offering to help other IFAs and give others the benefits of our experience of transitioning to fees over the past two years!
Posted by: Ken Hayden
Ha
Ken, your magnanimity is awesome. Not only have we all got it wrong but you are there to teach us. Wow, you deserve a comfy position at E14, licking envelopes, perhaps. When you see a train crash happening in slow motion do you throw up your hands and say, "Nothing I can do"? Do you gloat and say "Serves'em right for getting on it"? or do you try your best to stop it regardless of the chances of success. The RDR is not a panacea (sorry, Harry). It's not an improvement on the current model. It's not clever for an unaccountable regulator to force 10,000 advisers into early retirement or some other industry. It's not going to create more consumer engagement. Let's think, what will it do? Give the regulator something to do and something to point to when asked where the £400m p.a. went Give some advisers additional clients. Make the CII and FPS much richer. Decrease the time that remaining advisers interact with their families I could go on but. . .
Posted by: Alan Lakey
@Alan Lakey
Looking at my comment, I can see how it might appear that way! My unpublished comment explained that we have taken two years to get to our fee model and the amount of changes required in approaches, systems, training, contracts etc need to be addressed in an ever decreasing timescale. I do not believe that everyone else is wrong-but the changes will come and delaying making decisions will, I fear, shorten the timescales that fellow IFAs need to effect the changes. I am sorry that offering to share our experiences with others has offended you but hiding from the inevitable is not an option. Ken
Posted by: Ken Hayden
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How Come!!!
How come its taken 3 - 4 years for this type of survey to come out?? It highlights the FSA's massaged and manufactured figures regarding RDR with no dialogue with the public dont you think???
Posted by: David Hatton