IFA News
RDR’s slow motion impact on consumer confidence
Wednesday, August 7th, 2013

The RDR is already having impact on consumer confidence, according to a Cofunds’ adviser poll though while the headline figure shows 57% of advisers saying it is improving or will improve confidence, it all feels a little bit slow moving.

Cofunds asked 404 financial advisers – so statistically significant – how long they expect it to take for consumer confidence to change following the introduction of RDR. Sixteen per cent of respondents believe confidence has improved, 4 per cent expect to see an improvement this year, 13 per cent after a year, 12 per cent after two years and 12 per cent expect it to take more than three years. Meanwhile 42 per cent believe that RDR will have no impact on consumer confidence.

There is also an encouraging response to the new way of charging – which Cofunds describes as fees.

Thirty per cent of respondents to the same poll said their clients have reacted positively to the transition, while 57 per cent said their clients’ have on the whole responded neutrally. The figures roughly match responses to the same question in a poll conducted in April 2012, the platform says. However some quick Money Debate subtracting suggests there is a worrying 13 odd per cent of advisers who have clients who may not be totally happy which is something of a worry (unless IFAs no longer want those clients).

But it is the confidence part which is worth discussing here, because it means IFAs individually and as a sector may finally begin to see some benefit after all the hassle, the hurdles and the exams.

The biggest chunk of advisers who see confidence improving see it taking between a year or several years. It all feels a long way on from the start date and of course there is still a substantial minority who feel it will have no impact at all.

But while this is a very useful survey, I would really like to hear advisers’ views broken down one bit further as follows – is the RDR improving your clients’ confidence in your proposition and is the RDR likely to improve confidence in the sector as a whole? The second one is surely the killer question. If the RDR stops or significantly reduces problem sales and recommendations, fiascoes, scandals, imbroglios, call the problems what you will, then there will be a good case to argue it was worth it.

From there, it may then be possible to make a broader case for just why IFAs need to be more involved in convincing the public to save, invest and insure more (and contribute more than 8 per cent into a pension too).

By the way Stephen Wynne-Jones’ quote is quite interesting placing the blame for a lack of confidence “in the main” on providers not advisers. He says: “Advisers have proved themselves to be incredibly adept at managing to put their clients first, all the while taking everything the regulator throws at them. So it’s encouraging to see that with this latest piece of regulation their sterling efforts, in very trying times, are already feeding through to improved consumer confidence – a confidence, it’s important to remember, that was knocked in the main by providers, not advisers.”

(Providers not advisers? Would they agree at the ABI and the IMA we wonder)

 

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Will a growing need and demand for advice be filled by IFAs or will it come too late?
Thursday, July 25th, 2013

Advisers are being bombarded with statistics and calculations predicting further declines in their numbers from consultancies and academics, but also, sometimes from the other direction with suggestions that numbers might grow from Zurich, that more people will seek advice from Axa and that we need more advisers from Standard Life.

Most of these predictions are based on taking a long hard look at the numbers but sometimes coming up with well researched, sincerely believed and very different conclusions. Advisers themselves may feel a little steadier. They may look at their own business and see that things are actually going okay with a little help from the stock market, the housing market (in some parts) and now even the economy though it ain’t boom time just yet. Even adviser charging has not proved too much of a challenge (for those firms that have survived of course) and they may hopefully manage to deal with the probable end of trail too in 2016.

For the country and for financial services, the issue is hugely important and what worries me is that all these opinions could be correct after a fashion. So we may see a further decrease in IFA numbers – which unfortunately makes the rest of you easier to ignore – and then we may see big changes which increase demand. These include auto-enrolment, demographics, baby boomer retirement, the decline of bank advisers and the retreat of the state from welfare provision.

But if these forces come to bear too late, will it be advisers who fill the advice vacuum?

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Amid the direct to consumer headlines is this a genuine USP from Standard Life?
Friday, June 14th, 2013

Standard Life gave a briefing this week about its platform plans at its wee offices in the Gherkin in the City of London. The Money Debate attended. Among other things, it has announced a D to C platform which made a few headlines this afternoon. This has traditionally been a tricky move for insurers with IFAs worrying about losing clients to a business partner which is also a rival. Standard may have come up with the perfect way to sugar the pill. Certainly from what it said this week, it will harness its  asset gathering operation through things such as auto-enrolment, try and use that to encourage other investing, and when customers have enough assets to need advice they plan to refer them on to advisers who use the platform.There will be some details to be thrashed out of course. No doubt Standard will want to ensure the advisers it refers business to, don’t suddenly shift the assets to Transact or the like, though I’m not sure you can put that in a contract.  The usual devilish details and some unusual ones will no doubt apply.

Yet it is quite some offer and it will be fascinating to see how it works in practice.

Here is the key quote from Standard Life MD Richard Charnock. “Through a process we will work out who is advised and who is not, and for those that are not, if there is something that engages them through a self-serve proposition at the lowest level, perhaps selecting an Isa through us, that creates a pool or a franchise if you like that can then be referred over to our IFAs. Suddenly, IFAs that partner with Standard Life can see the benefit of future referral business coming their way.”

If they deliver on this, it is quite a compelling message. For their advisers, they do the difficult job of gathering assets, cost effectively, and pass them on. Now were I an adviser considering using the Standard platform, I would ask a lot of questions about this, along with the other essential due diligence. But if it works, it could be a real example of an acronym that is often abused in financial services – a USP.

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