Retail Distibution Review Archives - Page 2 of 2

Industry News

You may have gathered that the FSA are implementing something called RDR (Retail Distribution Review). The long and short of it is that to be called “independent” advisers must have a clear fee charging structure. In addition firms have been told to have higher reserves on deposit and have more exams. This all gets implemented from 1st January 2013.

Long story short, there are around 20,000 financial advisers in the UK and this is expected to reduce by 15% according to the FSA. A new survey places estimates at similar levels but with a further 17% unsure if they will continue to operate. The main sticking point is the general problem for clients to pay direct fees. Something that our clients have always done, but most firms have “fudged” this issue using commission to offset a fee.

Working through the maths, with a population of 60m the average adviser: client ratio is 1:3,529 as a conservative estimate. The obvious and unavoidable conclusion is that most people will be left to the mercy of online comparison sites or the Banks, who make up the lionshare of complaints.

Applying some fairly simple economics to the price of financial advice – supply v demand. There will be a much reduced supply, so in general expect prices to rise for most IFAs.

We have now had 11 years of experience advising in this way and will not find the new regime problematic. Our model has proven to be successful and sustainable.

We are a boutique firm of financial planners. We create financial plans designed to achieve a desired lifestyle. We will craft and implement your plan that will provide you with the greatest chance of accomplishing your unique goals based upon the values that you hold. Financial products are little more than the tools to achieve your required results
Call us today or visit our website for more information and to arrange a meeting

Industry NewsDominic2023-12-01T15:32:11+00:00

Critical Illness Cover

Skandia have decided to cease offering new Critical Illness policies. This is a real pity as it has been one of the market leading protection policies for many years. They will continue to permit existing policyholders to top up their cover, but not take out any new policies. Skandia were one of the very best in this field, but seem to have taken a commercial decision to focus on investments (including pensions). I can see from their perspective that this makes sense, but have to admit that it is not good news for consumer choice.

We are a boutique firm of financial planners. We create financial plans designed to achieve a desired lifestyle. We will craft and implement your plan that will provide you with the greatest chance of accomplishing your unique goals based upon the values that you hold. Financial products are little more than the tools to achieve your required results
Call us today or visit our website for more information and to arrange a meeting

Critical Illness CoverDominic2023-12-01T15:32:23+00:00

Some give up before they begin

You may not be aware that there is a drive by the FSA to get IFAs to charge fees properly and move away from old style commissions. The reason for this being that most bad advice has occurred by advisers selling products in order to be paid and some products and insurance companies can pay far more than another for exactly the same thing.

As I set the firm up on a fee basis 10 years ago, we still seem to be ahead of the majority of IFAs who still seem to operate on commission terms and have business models that rely upon high upfront remuneration. I have sympathy for those that are trying to change to something more like our model – where I believe our clients (customers if you are the FSA) are treated fairly. The journey is long and in our 10 years to date I have never found a short-cut that was worth pursuing.

The industry press has been covering the proposed changes for significant time now. In this weeks Money Marketing quotes Gareth Marr as saying “Large networks and nationals have business models that are so based on commission that the cost of converting will decimate their economic model and lead to a wipeout of the IFA community”.

I fully accept that the change will be difficult, but I have spent the last 10 years building a firm that treats clients fairly and ethically. We charge fees and for sure, not everyone can afford our services. It has been a long hard slog to grow the business . However just because something is difficult does not mean that it shouldn’t be attempted. We aren’t talking about going to the Moon, we’re talking about a fairer way to charge clients.

For sure the implications for the industry are significant. For starters, how to attract and retain staff is an issue. All our staff are employed and at present salaries have very little connection to personal targets as our emphasis is on service, which we live or die by.

The world is changing, a sense of ethics is long overdue in many aspects of commerce. We all know that the key word is “sustainable” yet we seem unable as a society to fully embrace the implications which I heard recenlty described as “creative destruction” a rethinking of not just how business is transacted, but why.

We are a boutique firm of financial planners. We create financial plans designed to achieve a desired lifestyle. We will craft and implement your plan that will provide you with the greatest chance of accomplishing your unique goals based upon the values that you hold. Financial products are little more than the tools to achieve your required results
Call us today or visit our website for more information and to arrange a meeting

Some give up before they beginDominic2023-12-01T15:32:45+00:00