The FSA are seeking to make the financial services industry more professional with the introduction of RDR which will come into affect as of the 1stof January 2013. They are ensuring all financial advisors are qualified to a minimum of diploma standard (level 4) and beyond, thus guaranteeing a better level of service to clients.
In effect the FSA are cleaning up the industry, placing restrictions on the advice that can be given out from people who aren’t qualified to a certain standard.
On the surface it seems RDR should be a very positive thing for financial advisors and certainly this may be the case for some of you. As something which aims to improve public confidence in the financial services industry as a whole then surely raising the bar in terms of ethical standards and qualifications is a valuable strategy? Furthermore, surely it’s true that charging a fee rather than commission payments will allay the fear of mis-selling?
On the contrary there are also considerations to be made as to whether RDR has any implications restricting advisors. For example, as an advisor who already operates in a professional manner, having worked in the industry for a substantial amount of time, do you consider the necessary changes in terms of qualifications invaluable or disruptive? If this is the case, are you considering a move from the financial services industry? Does this mean the industry will notably lose a lot of hard working, dedicated advisors?
Is it also possible that advisors will continue to practice without any intention of doing anything about it in terms of qualifications? Is it encouraging non regulated advisors to abuse the new regulations under the guise of a servicing consultant?
There is also the question of whether your company is ready for the impending RDR? Certainly for large companies whom employ more than 40 advisors, it’s a daunting task to ensure all advisors are qualified to the necessary level.
However, if you are part of a smaller company do you think you have the resources to ensure your company is RDR compliant?
Here at Executive Network we work with a large number of IFAs and as such, we’re finding that RDR is having an impact on recruitment within the financial services industry. For example, there are a number of advisors who themselves are RDR compliant and have taken on board what they have to do in respect of the impending RDR. However, many have concerns with the companies they work for regarding their RDR processes and procedures, that their companies are not taking their part in RDR seriously or their RDR proposition is not complete.
Some might argue these companies have time to turn things around, however, in spite of this, many advisors are contemplating a move to companies who are more RDR compliant. If a company is not ready for RDR does this mean we will see vast movement in the industry as a whole? If this is the case, when will this happen? Moreover, with this in mind, will there be increased competition for jobs in the future in what is traditionally a candidate short market?
And does this mean advisors should be more prepared or exploring more opportunities available to them now rather than in the future when competition will inevitably be higher? With all the changes the industry is set to face, would it also be prudent to make a move now? Would it be advisable to transfer existing clients prior to RDR so they are comfortable and familiar with a company whilst changes are being made?
Executive Network Sales Ltd specialises in sales vacancies and associated positions at all levels across a range of niche sectors throughout the UK.