RDR prep: Why we started by data 'cleansing'

Michael Wall, managing director of Beaumont Robinson, explains why the new regulatory environment does not signal Armageddon for advisers.

The first thought I had when writing this article is how RDR has (for many of us) grown into an Armageddon-depicting event, which often defines firms by how they are placed on the curve towards (and through) this industry change.

The truth is, even though our emotions will tell us this is a regulatory-imposed change, the actual parts of RDR (when viewed dispassionately), are certainly good things to be doing anyway, as an operational business.

I was one of the first to sigh, on reflection because I realised how busy the in-tray would become with the necessary procedural changes; but we found a way of coming to terms with the change – as I describe here. In overview, I would argue that even though imposed change always feels more onerous, self-change can be equally hard to innovate and muster – and the RDR has acted as a timely catalyst for our business change.

For example, even though the RDR category of professionalism was coined to describe adherence to QCF level 4 attainment – our firm’s own view was we desire to demonstrate this level of qualification, to our clients anyway.

Indeed the main driver for us being at the forefront of the creation of the first BSc in Financial Planning in the UK (through Bradford University School of Management) was purely an attempt to create the opportunity for a higher level of professionalism at entry level into the sector – ‘raising the bar’ as we say.

We are aware there is no substitute for relevant adviser experience, but we did not see this QCF4 as a ‘net’-burden on us, only accelerating our desire to up-qualify (in a consistent way), throughout the firm.

Taking the adviser charging element of RDR, truthfully, we felt this was going to rock the boat for a while in the sector. But we knew we were well placed as we had annuitised our business some years ago and the transition to customer agreed remuneration would be less of a challenge for us.

We realised that in any event, if we looked at the problem from the other end of the telescope, it was the perfect impetus to isolate what we do for our clients and how we convey our best worth.

The benefit of transparency

In a regime that will require implicit remuneration to become explicit, our language has turned towards the benefit of this transparency and spending our focus on how we can show our clients the benefit we bring to their financial wellbeing.

We dramatically updated our client proposition and within this created client segments where we are able to give absolute clarity to the client services that we offer and enable our clients to select the service that is most suitable to meet their needs.