With the retail distribution review (RDR) just around the corner, it is a worrying sign that a substantial number of advisers still have not settled on their business proposition for the world of 2013 and beyond.
The Personal Finance Society’s (PFS) annual survey of members has revealed some disconcerting results about RDR preparations. The most surprising is one is that 9% of members have not decided whether they will operate as restricted or independent after the RDR.
The survey was conducted in September, and while the figure may have come down since then, the results still highlight a level of uncertainty that is worrying at such a late stage in the day.
But who can blame them? The Financial Services Authority (FSA) has hardly covered itself in glory in its pronouncements defining independence. Of all the aspects of the RDR, this definition has been arguably the least well articulated. After its initial iterations of the requirements sparked fears that many would fail to meet them, the FSA has been back-pedalling, repeatedly downplaying the shake-up it would provoke. Vested interests have contributed to the problem by exploiting the ambiguities of the definition. Given this, confusion is unsurprising.
And the Solicitors Regulation Authority hasn’t helped, by leaving its crucial decision on whether to jettison its commitment to referrals to independent advisers to the last minute. Or, to be more precise, to just 33 days before the RDR comes into force.
The decision over independence is not an insignificant one for adviser businesses. It would have been helpful if those asking the question had taken more care in phrasing it.