Independent Financial Advisors (IFA) are uneasy about the fast-approaching Retail Distribution Review.
With the Retail Distribution Review, fast approaching their self imposed deadline for the full implementation of their aims of December this year, there is growing unease amongst Independent Financial Advisors (IFAs) about the way changes are being implemented. While the key aims of the body are undoubtedly beneficial to both customer and advisor, the route set out to achieve them has been criticised by many. The body was set up to regulate the way products are sold, hopefully reducing the number of products that come under scrutiny from the FSA.
The current climate of complaints and business review is ample proof of the fact that a change is needed; with PPI claims in particular soaring once again in the past month as claims management companies push through thousands of case files.
There is a growing feeling of discontent amongst IFAs though, as they feel they are caught in the middle of the regulation changes after adhering to the sales processes set out by their respective institutions at the time. It is they who will have to ensure that they are re-qualified. The increasing amount of qualifications needed to become an IFA is a stark contrast to just twenty years ago; with Jonathan Plant, director of First Service Financial noting that when he “first started in 1990, (he) had a week’s training to get started”.
Evidently the regulation changes are intended to uphold the RDR’s aim of ensuring customers can “clearly identify and understand the service they are being offered,” but IFAs feel that they are the ones being made to pay for bad selling practice. With growing unease between IFAs and the FSA, there are fears that consumers could be the ones who pay the price again if institutions and advisors fail to adhere to the guidelines set out by the RDR.