Helen Morrissey talks to Buckles' chairman, Nigel Speirs about how the firm is preparing for the retail distribution review
How are you preparing for RDR?
We are taking it very seriously as we believe the impact of RDR will fundamentally change the nature of the financial advice model in the UK. We began running a graduate trainee scheme back in 2002 and 40 of our staff came from that scheme. Part of that scheme involved taking examinations and so we are marching through that route pretty well. The bigger challenge I feel will be moving to a place where we are properly charging fees for our services. Most advisers think they have already moved to such a structure but they haven’t as yet. I think this move will go hand in hand with the move towards platforms that enable these charges to be taken in the most efficient and transparent way.
Once clients become more aware of what they are paying for advice then I think we will move more towards becoming a more service driven proposition – we will have to be able to justify why we are being paid and how much we should be charging for what we do.
So I feel that while we have made a big commitment to helping advisers get their examinations it is not the key challenge we will face. Charging fees will make the industry more transparent and it will cause clients to question what they are paying for.
Do you feel that the extra responsibilities brought about by RDR will prompt advisers to leave the industry?
I think it will. We have acquired about 15 businesses already and we expect the pace to quicken as more people look to retire from the business in 2012. I have heard that anything up to 30% of advisers could retire as they do not want to, or are unable, to reposition their businesses post RDR. As a result, I would expect to see a lot more consolidation affecting the industry.
What impact do you think this mass exodus will have on the adviser community?
We will see many advisers leave the industry and so we need to make sure there is new blood coming into the industry to replace it – that is why we chose to go down the graduate route to ensure we had new people entering the business.
How prepared do you feel advisers are for the advent of RDR?
I think a lot of advisers are making plans and getting their businesses ready for RDR. What I think does not help are the current rumours in the press about RDR being challenged. These headlines keep people in denial as they think they can put off doing anything. We have to realise that we have already had a four-year planning blight while the FSA decided what they wanted and we need to move forward now.
What effect will RDR have on the industry?
I think RDR will help the advisory community be seen as more of a recognised profession than it has in the past. I think we will see a lot of outsourcing starting to happen as advisers look to concentrate more on their financial planning. The key issue for us is that if the FSA chooses to apply the definition of what constitutes independent advice as deeply they wish then independent advice could end up losing out. The current criteria the FSA is proposing is too strict and I think if it is applied then we could see the currently strong independent advice sector start to falter.
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Retirement Planner Forum 2019