RDR’s slow motion impact on consumer confidence

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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