Countdown to RDR: How to add value

Suffolk Life’s Claire Brooks offers advice on the areas of RDR still worrying advisers.

I am sure the whole of the adviser world is fed up with hearing about RDR, but it’s not going to go away. Some advisers are ready and some have everything planned out to be ready, but there are still some that have not worked out what gaps they have and how they are going to fill them.

Recently I have been speaking at a number of IFP and PFS seminars and the subject has come up at all of these events in one way or another. It is safe to say those gap-fill sessions were heavily subscribed and attended. Below I will cover some of the areas of concern and what we have learnt from discussions with advisers.

One of the key activities advisers are highlighting to providers is that they are still concerned as to the true impact on their business of RDR. The most effective way to handle this is for the principals of the practice to take the responsibility of ensuring that the whole firm and its advisers are ready for RDR. For some it will be simple and clear what extra steps are needed and for others it will be more of a leap to meet the timescales.

The first step should be to audit where the company is in relation to where they need to be and when they want to be there. Once known it will be easier to work out the implications of each issue.

Service

Discussions on RDR have become very focused on fees but it isn’t just about fees it also about service. Many advisers who have not historically charged fees are naturally incredibly concerned about how to broach the subject with clients. The simple answer to this is to know what you are worth.

How much time do you spend on unseen activities, and be able to demonstrate this to your client. A lot of what advisers do is not seen by the client so even though you may not want to confuse your client with all the underlying information you or your para-planner has spent time requesting and collating, give them the option to see it.

Once they see this they are less like to dismiss all the hard work that has gone into the concise report you are presenting them with. It is about what you do for your client not how much paper you have produced for them.

For adviser firms, time is of the essence. Some will want to phase in, or worst case scenario, wait until January 2013 to bring in fee charging, but it is good practice to get started now. Record your time and work out what you are charging your clients through the payments you are already receiving. You don’t want to suddenly find out you are under or over charging significantly as this will have a knock on effect on your whole business.