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RDR – Independent Financial Advisers - Where are we now
After the worrying proposals contained in the earlier version of the RDR, the latest versions of the RDR are much more practical and relatively favourable to IFA’s than we had expected.
That is not to say that IFA’s should be complacent about the changes required to hit the challenging timescale currently proposed. The core changes required are:
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All advisers to be qualified to NVQ level 4 or above
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All payment and remuneration to be agreed by the Adviser and the client – no Provider input at all
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There are important changes proposed in how Capital Adequacy is calculated – these could affect some firms
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Firms must be clearly Independent, including demonstrating that they have the resources to conduct proper research and Due Diligence.
Taken together, these changes will impose some strain on some firms, and procrastination is a dangerous option.
Options to explore
RDR will affect all Independent Financial Adviser and Financial Planning firms so questions to ask now are:
- Have we establaished our basis for fees and the impact on our business model?
- Which staff have not yet reached the new Level 4 standards and if not, what is the plan?
- Do advisers know how to present the new fee charging arrangement to clients?
- How will we need to re-write our T&C, Compliance and TCF policies to comply with the RDR Proposals?
- Have we sufficient capital, if not how will we raise it or should we be looking for a buyer?
What can you do now
Now is the time for finalising your strategy and taking action. Consider getting help with an ‘RDR ready Audit’
- Put a project plan together, based on your answers to the questions above.
- Advisers not meeting the professional standards must have an individual plan that they follow.
- Review and update your sales process.
- Implement your new T&C Scheme particularly for new advisers.
Require assistance now? Access our Useful Links, Training and Tools & Tips on the menu.
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