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Bancassurers - Where are we now with RDR?
The regulatory landscape post RDR, (Retail Distribution Implementation Programme, RDIP), coupled with challenging market conditions is forcing Bancassurers to assess their business models and re-examine the products they offer under their ‘regulated’ banner. The difference between investment advice that is independent and sales service will certainly raise questions if it hasn't already.
Think of your own business model, the different distribution channels, the range of products and the way they are advertised and sold to the customer. The whole range of channels from wealth services to straightforward on line product sales will need to fit the proposed approach.
Independent advice means truly independent. The new RDR proposals make it clear that if you are trading under the guise of independence, not just advising on packaged products, you need to provide unbiased, unrestricted advice based on a comprehensive and fair analysis of relevant markets.
Sales will include a number of sales models that that are not independent, simplified advice, non advised guided sales and execution only business. Money Guidance services will provide clear guidance to those customers seeking help on where to go for which type of service they require.
Options to explore
The questions to ask now are
- Should we concentrate on the middle market space and use the Money Guidance as a gateway into this area.
- Should we compete with the IFA market and focus on promoting the right products to consumers.
- What sustainable business model can survive post RDR
- How should we communicate the options we offer and what that means to our customers and prospects
- How can we use RDR to rebuild consumer confidence.
- How competent and qualified are our people to operate in a post RDR world
Whatever busness model you decide upon will involve re-engineering of systems, re-training of your people and effective communication to deliver your new proposition. Our experience of the past regulatory re-modeling of the distribution landscape suggests that major system changes and wholesale restructuring of the skills and knowledge of people takes twice as long as you expect.
What can you do now
Don’t postpone your thinking, researching and planning.
Act Now:
- Research the beliefs and attitudes of your customer base to understand what they want from a bancassurer
- Test the viability of any proposed buiness model with qualitative and quantitative research
- Plan your strategy to present your propositions and the benefits they bring
- Assess the competency standards needed for different sales models and involve training in assessing cost/time
- Idenitify the three categories of advisers - the competent at the new Level 4 standard, those requiring top up to Level 4, those taking the new qualifications.
- Develop a strategy to adress the new CPD standards and how SPS's will be issued.
We will keep you updated with the issues and developments facing the Bancassurance world
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