Advisers worried about changes to charging are probably taking too simplistic a view of how to earn their money, says consulting expert Roderic Rennison.
Too many advisers are working backwards from their goal salary instead of starting by making their client proposition central, he says.
Rennison, who chaired the Professionalism and Reputation work stream of the RDR - now the Retail Distribution Implementation Plan (RDIP) - in 2007, says: "Just doing the calculation many advisers do, which is 'I want to earn £100,000 a year so I have to do 1,000 hours of work charging clients £100 per hour', is far too simplistic a view.
"If they are operating like this they will have problems and will need to change."
Rather than just relying on an income from funds under management, advisers need to separate out what each part of their business does for the client and charge accordingly, says Rennison.
The former CEO of Thinc (now Bluefin) says advisers should charge in a way which makes sense from the clients' perspective.
"Take a more scientific approach," he says. "Break it down. Start by focusing on what is good for the client, then what is good for the adviser comes naturally."
Even without the RDR, Rennison believes there was a recognition following the credit crunch the adviser market needed to change.
Advisers should see the RDR as a "positive opportunity to build a business which has value", he says.
"The qualifications change is an opportunity to think about the process of focus. What qualifications do they want to take? What areas can they branch into so, yes, they can serve more clients, but also so they do not get bored," says Rennison.
Moves to increase professionalism in the financial advice industry have led to comparisons with professions such as accountancy and law, with some sceptics saying financial advisers will never achieve the same status as lawyers because their business lacks the same kudos.
Comparisons are less important than the successful application of practical professional standards, says Rennison.
"People come to an adviser to consult, to benefit from their experience and knowledge," he says.
For him, professionalism is meaningful professional development, transparency, understanding what you advise on, recognising your limitations, and working in a way which is equitable and fair.
"Each adviser is different," he says. "Becoming more professional could just be a case of better communication with your customer, whether on advice or charging."
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