Your post-RDR options if you don't meet the deadline

New Model Business Academy’s Lee Travis looks at the options for advisers who will not be RDR ready on 1 January 2013.

By financial services standards, press coverage of the implications of the RDR has been significant to say the least. If a financial newspaper was your sole source of information, you would probably have imagined the RDR to be of similar magnitude to the Red Sea Charlton Heston faced in The Ten Commandments.

While some will arrive safely on the post-RDR shores come 1 January 2013, you would be forgiven for thinking the ones left behind (at least the 30% Hector Sants felt was acceptable to lose) will fall victim to the merciless crashing waves.

However, the reality of the situation will be much less spectacular and nowhere near as dramatic. Let’s face it – whether you are a supporter of the RDR or not, the last thing it is going to do is take you by surprise.

Where are you at?

With little more than a year to go, advisers find themselves in one of a number of groups. They are either:

• Qualified at Level 4 or above;
• Not currently Level 4 but will be ready in time for 2013;
  Working toward qualification but may not be ready in time for 2013;
• Not working towards the requirements of the RDR, but wanting to stay in the industry; or
• Choosing to leave the profession altogether – whether reluctantly or otherwise.

If you fall into one of those first two categories – congratulations to you. You have obviously planned, prepared and studied very effectively and in a lot of cases will have done this regardless of the RDR criteria.

If you want to carry on as an IFA in the future, but will not have reached Level 4 qualification status in time, do not despair. The waves may not be about to come crashing down on you. No profession should be willing to casually toss aside those who are passionate about what they do for a living.

Don’t throw in the towel

Some IFAs , for a variety of reasons, may be prevented from achieving the required level of qualification before the implementation of the RDR. If you find yourself in that situation, instead of just throwing in the towel, you could consider applying for a “temporary suspension of permissions” from the FSA.

This should be viewed as an interim measure to place your authorisation to give investment advice on hold, keep up with your CPD requirements, finish up the qualifications that you still need, then re-apply to reinstate your permissions at the appropriate time.

While taking your foot off the gas when we are making real progress is not something I would encourage, it may be comforting to know you have further options you may not have considered yet. Obviously you would want to avoid this situation if possible as it would leave a gap in the service you deliver to your clients which may not sit comfortably with you.

If you have decided to leave the industry altogether, then I hope you do so gladly, rather than because you have felt pressured to do so by the burdens of red tape and regulation. I also trust you can afford to do so and have ensured the impact on your business will be a minimum.

However, if you are resigned to the fact you might just not quite make the deadline, you have decided that advising on retail investment products might not be the best role in financial services for you, or you are thinking about an exit sooner than you had hoped, there are some alternative options – either as a few months’ stopgap, or as a permanent career move.