Post RDR advice is in a better place: 1
As the FCA published its RDR interim reviews, Keith Richards, CEO of the Personal Finance Society (PFS) gave us his views on how RDR has affected adviser businesses and the development of financial adviser charging.
ABR: In your view, has RDR provided positives for the financial advice market?
Keith Richards: From the perspective of the financial advice profession, financial advisers have emerged stronger and more resilient as a result of RDR. Most advisers that I speak to generally would accept that they are now in a stronger place rather than a weaker place.
I think the run up to RDR created so much uncertainty and speculation and scaremongering that actually even the most resilient advisers out there must have been questioning every day how big an impact this piece of regulation was going to have, even though most advisers were better positioned than many had thought they were. Post RDR I think we are in a better place.
It’s interesting that we are now seeing other changes which support that evolution. Last year as part of the Care Bill, we had Peers and MPs lobbying for the mandating of impartial professional advice in the decision-making process. This year in the sweeping pensions changes brought in through the Budget we have a government that is recognising the need for a more vibrant advice centre if we are going to be able to shift more responsibility for retirement funding from the state to the individual in the future.
I think there is a lot of opportunity arising from RDR. It was often seen as the catalyst that would see many consumers walk away from what was perceived as transactional relationships, whereas from talking to our members, we are seeing little evidence of existing clients walking away. In fact, what RDR has shown is consumer endorsement for advisers. It’s clear that the majority of people that receive advice value it.
Notwithstanding we are in an evolutionary stage, and the market is certainly not perfect, the RDR has helped provide foundations from which we are moving from an industry to a profession.
The PFS is in the final stages of developing a programme of best practice guidance around fee charging as well as areas such as due diligence, suitability and disclosure. The first module on Adviser Charging will be launched in Q1, 2015.
Keep an eye on adviserbr.wpengine.com for more interviews with Keith Richards.
Visit the Personal Finance Society website
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