Revealed: The biggest barrier to RDR

public indifference to RDR ?

The arrogance of this assumption is astonishing. If the public dont understand then the problem lies firmly with the industry not with its customers ! My wife doesn't understand me says the man who needs an excuse for his failing marriage ! The biggest hurdle to the RDR will be the realisation by advisers that they are not seen to add any value to peoples financial affairs and that justifying being paid will be harder than they currently imagine.

Posted by: phil melville

Whats a fair price

The 11 year old may be right (£50 for mowing a lawn). The question is how big is the lawn - how long will take - will he be doing any extras - cutting the edges etc. It all comes down to letting clients know what they will be getting from the adviser and how this will benefit them in the long run. Advice is valuable and needed by all - a little bit of knowledge can be dangerous as all DIY experts will know!!

Posted by: Steve S

There are no barriers to RDR

The truth behind RDR is that it will be more profitable for the platforms/wraps that eventually survive. If that statement did not hold, then the major providers could have stopped RDR at outset by banding together. They did not, but I pity them now as they’ve discovered they are now in a situation where they now have to group together through, for example platform groups, to lobby the FSA over legacy commissions and request an extension to the RDR deadline for how they can manage this type of business. The providers will explain to the gullible IFA, believe them if you wish, that they are doing this to assist several IFAs in the transition process of survival. The reality is that they offer systems that are already full of flaws and require so much IT rectification that they cannot solve before RDR already. Most IFAs that do not just do cheque-only investments, for example drawdown, ISA and pension transfers; know that the platforms that we are being forced to support cannot even grasp the straight-through processing that they purport to offer. Most of them cannot even work out how to provide a bond on their systems before RDR, so there is no hope that they can find the additional IT resources required to sort the legacy products issue. In other words, the truth behind RDR is that the product providers and platforms have thus far cared not about the IFA sector being left to wither on the vine whilst they gear themselves up to provide business to consumer offerings over the next five years without the need for intermediaries. As such, my pity above is one of crocodile tears only. I care as much about the providers as they care about the IFA sector. The article is so bereft of insight it is an embarrassment to its publication. RDR will come in. There are no barriers to it: 1. The IFA sector is too disparate and too afraid of its peers to band together and support a single TCF & RDR-compliant platform, as a sector at the total exclusion of the whole of the rest of the market for six months. This would force the excluded providers to force the FSA to back down, as their cashflow on the 30bps that they squeal about surviving on would dry up, especially if faced with thousands of re-registration requests. I do not see how else it could provide a barrier to RDR. Its representative organisations are toothless. 2. That leaves the provider sector to provide the barrier. As above, it will be more profitable for the platforms/wraps that survive, as the RDR excuse is perfect for them to continue to pass on almost all of their back office costs to the IFA. It is not going to provide a barrier detrimental to its long-term business plan. I wish my business was paint, “Do you want blue or red, sir?”

Posted by: Jon Short

John SHORT!

Not in this case!

Posted by: Peter Taylor

Biggest barrier to RDR

Please Robert do not be so niave. The purpose of RDR has always been to increase the banks and direct sales forces of the insurance companies share of the financial services market. IFAs have protected the general public from them for years but are a thorn in their sides. As you say the average member of the general public glazes over when lectured on financial matters and hardly ever reads any of the documents the FSA makes us give them. They are too busy, not financially inclined, maybe are not capable of getting their heads around the charging complications or are just plain not interested. They simply want to find someone they can trust who will do that for them. Some poor souls have looked to their banks to do this for them and we all know what happened to many of them. The general public are like me where cars are concerned. The only thing I know or want to know about them is whether or not they go. I employ a good mechanic I can trust, he does the necessary and he makes a decent living out of it and I am generally happy. I don't need to or want to go to night school or day school to learn about engines and cars and neither do most of the general public want to know the ins and outs of financial products. Are you proposing forcing it on them? Following your line of thinking this industry and the government should be forcing financial education onto everyone and the motor industry should also be doing it. Not to me please.

Posted by: John Smyth

Fair day's wage for a fair day's labour

RDR is not about promoting banks and tied agents Mr Smyth. And where were the IFAs when the general public were being ripped off by low cost endowments and personal pensions? No, RDR is about making sure customers understand how much an adviser is charging them. As customers won't pay extortionate fees, either IFAs will have to reduce fees to reasonable amounts or lose their business. Simples. PS: if £50 sounds like a lot to mow the lawn, how is it that some advisers are happy to accept thousands of pounds for a couple of hours work...and still won't stop bleating on about back-office costs? Cut your costs and cut your fees or go to the wall. That's what RDR is about. Welcome to the real world folks.

Posted by: Anonymous

RDR barrier

I don't know who anonymous is but head firmly up rear end which is probably why he / she is without name. John Smyth , on the other hand, has a sensible , rational and reasoned approach to the gerrymandering that is the ugly face of prescriptive regulation with a covert purpose; which has little or nothing to do with serving the public in a responsible and professional way. Well said, and plainly stated John. Head up anonymous its the weekend.DO SOME RESEARCH AND REVISION ON ENDOWMENTS AND PENSIONS.The banks and building societies created the 230% LAUTRO commissions for endowment sales - not IFAs - with government's blessing the last time the banks were in trouble (to reflate their ailing solvency margins) sound familiar?

Posted by: Terence Patrick O'Halloran

Banks, building societies, direct sales, tied agents

were responsible for most of the misselling, not IFAs.

Posted by: Ken Durin