A poll of some 700 advisers - who were permitted to respond anonymously - has revealed what they really think about the Retail Distribution Review (RDR) and, crucially, what their clients think...
The research, released today, was conducted by online adviser community PanaceaIFA...
Do clients understand what RDR is?
1) "They understand what the RDR is but can't see how the removal of commission will help them get advice."
2) "They think it is an over-reaction and that the current procedure is sufficient. They are very much against paying directly for advice."
3) "99% do not have a clue about RDR."
Do clients know they will now pay you directly?
1) "My clients do not understand why they cannot have the choice of paying a fee, an hourly rate or paying on a commission basis."
2) "Many say they won't do it and will simply go back to the banks where advice will be restricted - they will have reduced choice."
3) "[This is a] daft question: they know they have to pay for my services now - the wording suggests they do not and this is what the RDR is trying to fix..."
Do clients understand the new interpretation of independent advice?
1) "Most see [the distinction between independent and restricted] as a means for the banks to make bigger profits at the expense of the public."
2) "There will now be four different types of advisers [instead of two] this will certainly lead to confusion."
3) "They really do not care, as long as they get good advice and service at a reasonable cost."
Do clients need educating about the impact of RDR?
1) "The FSA should take responsibility for this, it's the FSA's idea and it is constantly moving the goalposts."
2) "The government needs to run a massive TV and press campaign to tell the public that the FSA, an organisation that will be closed down, has decided that the public can no longer have a choice regarding how it pays for its financial advice."
3) "Advisers are perfectly able to inform clients of the facts surrounding RDR and the impact it will have on them, whether positive or negative."
Would clients prefer that a commission option remained?
1) "Most definitely. 95% of my clients would prefer the commission option."
2) "I strongly believe the paying public should be free to choose - that's not the job of the unelected pen pushers!"
3) "As long as full disclosure is the common rule for all advisers then the method is not important."
What is it clients value?
1) "There is no substitute for doing business with someone you know and trust."
2) "They value experience and face to face time."
3) "Value for money is vital. Qualifications are fairly important, but the vast majority of clients want investment and protection explained to them in an easy to understand fashion."
Will your clients appreciate you being better qualified?
1) "They believe that I am adequately qualified and experienced."
2) "Raising the standard of professionalism is one of the few things the FSA
has got right in the recent past."
3) "A highly qualified adviser does not necessarily make a good adviser. Experience of sourcing and analysing suitable products is a part of learning too. Not having a certificate does not make me unqualified."
Will you lose profitable clients as a result of RDR?
1) Two of my top three clients have decided they can "do it themselves"
to save the renewal commission, following the guidance I have given them in the past."
2) "Not so far, as we have taken the time to meet and 'educate' our clients."
3) "I expect to gain a larger slice of the market as older IFAs bail out in 2013 and
independent advice is in short supply."
Will you and your business be RDR ready by 2013?
1) "My business will not be ready because I cannot see any viable business
model post RDR."
2) "We are working hard to achieve this, but qualifications are not the only issue
fo us. The mixed messages and uncertainty created by the FSA is not helping."
3) "60% of my colleagues will leave the industry."
Post RDR what will your business model be?
1) "Independent if possible, but may have to become restricted depending on the FSA's requirements for 'independent' advisers."
2) "Part of a network and I will abide by their decisions."
3) I cannot see how a sole trader can hope to be "independent" - he/she
cannot possibly have the time to accommodate the FSA requirements."
Take a look at PanaceaIFA's research HERE.
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