Do you want more say on gap-fill?

David Muncaster, director of intermediary clients at Close Asset Management, says the lack of clarity around gap-filling is leaving many advisers confused.

With RDR fast approaching, confusion still abounds among IFAs when it comes to where exactly they need to upgrade their skills to comply with the new regulatory framework. In an effort not to fall behind or fail to meet the requirements, many IFAs are understandably anxious to fill the gaps in their knowledge without delay.

This is leading many advisers to go to considerable expense to boost their qualifications – but for many, these costly top-up qualifications are actually surplus to requirements.

The crux of the issue is that the exact rules imposed around compliance arising out of the RDR legislation have yet to be defined by FSA, with the latest list of approved qualifications having just been announced, and more still to come.

Yet with only a year to implementation, understandably advisers are getting anxious for more direction. Research from Unbiased.co.uk last year showed that this is a real concern for advisers, with a 124% rise in Google searches for ‘RDR qualifications’ from January-September 2010. Further research by L&G last August showed a huge 78% of advisers wanted additional provider help with qualifications.

Client confidence

Given the short time window, most advisers are eager to ensure that they can remain in business and retain the confidence of their clients post RDR. Beyond this, there is a desire to look at what extra qualifications can be taken that will genuinely provide value in the new RDR-compliant world of advice in 2013. So, weighing up these factors, it is not surprising many feel obliged to upgrade their qualifications rather than waiting for the FSA to set their terms.

Duplicate qualifications

Sadly, with no definitive answers forthcoming from FSA, many advisers could be gaining qualifications which they are unlikely to require, may not differentiate them from others and could even duplicate qualifications they have already done. The associated cost of this expensive mistake could be huge, making an already expensive process of becoming RDR compliant more costly still. It also begs the question of who will shoulder the ultimate burden if these costs to IFAs materialise? Quite conceivably the costs will simply have to be passed on to clients – hardly the desired outcome for consumer focused legislation.