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In a restricted world is there still value in being independent?
by Danielle Levy on Jan 24, 2013 at 12:27
This is particularly evident in the number of traditional investment management firms that have moved into financial planning through acquisitions, strategic partnerships or hiring in teams, while others have sought to pick up assets from advisers looking to outsource investment management by launching model portfolios and unitised offerings.
While the RDR is creating opportunities, some are concerned about the longer-term consequences of regulation driving business models.
Paul Killik, founder of Killik & Co, is particularly concerned that if regulation is driving consolidation, it removes competition and choice for consumers. He also fears it is stifling innovation and competition.
‘This has all the obvious contrary effects on pricing and choice. The problem is that we are not getting new businesses coming through,’ he says. ‘The green shoots are not there because it is a heck of a job starting a business up.’
Michael Maslinski, a consultant, fears regulation is driving the industry too far towards standardisation.
‘I don’t want to knock the suggestion that things need to be properly documented, but I do want to knock the idea that things need to be standardised,’ he says.
He also warns on the negative implications of reacting to shorter-term regulatory pressures.
‘It often forces institutions to do things that are inappropriate. When the regulator becomes an adviser, there is a big danger that regulators are running the advice industry and they must stand up and be accountable for that advice,’ Maslinski says.
However, others hold a more upbeat view on the consequences of the RDR. Close’s Andrew says the RDR has caused firms, particularly those that are restricted, to evaluate and communicate what their proposition entails, and this should benefit the underlying client.
He adds it has given the industry the impetus to spend a lot more time communicating to clients the actual substance of its proposition and what it does.
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