Twitter icon Email alerts icon Latest News RSS icon Magazine icon Stay connected:

View the article online at http://citywire.co.uk/wealth-manager/article/a653376

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.

Sign in / register to view full article on one page

4 comments so far. Why not have your say?

Alan Steel

Jan 24, 2013 at 16:48

If you were an investor , why would you settle for advice that was restricted ? Or am I missing something ? Mind you I'd rather settle for advice that was obviously in my best interest than from somebody competing with others to sell more of this and that !

report this

Gillian Cardy

Jan 27, 2013 at 10:40

How interesting : why did the headline writer not see fit to pose the question :

"In an Independent world is there value in being Restricted?"

As one of the consumers researched in one of the earliest documents at the start of RDR said : “Why would you go to [a non-independent adviser] when you can go to somebody who will search the whole market?”

We have moved on from the any colour as long it's black style of customer service proposition ... the 21st century is not a great time to say to people what they can and cannot have - determined by the supplier.

Anyway - discretionary services are not personal recommendations and outside the all of the RDR rules anyway ...

And if you claim to be in the personal financial advice space and decline to advise your clients on pensions or life policies (annuities / investment bonds) then I think most people would agree that this is a Restriction to the advice you give.

report this

Wizdon

Jan 27, 2013 at 18:52

Re the question posed : 'Why would you go to [a non-independent adviser] when you can go to somebody who will search the whole market?” Well, consumers do, and in droves - e.g. success of SJP- so maybe on balance process, governance, strong backing, size, and just maybe people want to deal with successful profitable firms with 'sales people' that motivate them to take action and make them feel good!

report this

Gillian Cardy

Jan 29, 2013 at 15:01

Which is precisely the evidence that suggests to the regulator that the status disclosure regime might not be working as well as it should - good process and good governance are not (or shouldn't be) the preserve of big companies - neither is success or profit.

Let's ask consumers if they want to deal with "sales people who make them feel good" ... personally I'd expect the results to be less than encouraging!!

Professional advisers with clients' interests at heart who tell them the truth even if it hurts might be somewhat more attractive as a proposition for a post-RDR world??

report this

leave a comment

Please sign in here or register here to comment. It is free to register and only takes a minute or two.

News sponsored by:

Sponsored Video: Bringing it all back home


As the UK coalition government strives to rebalance the national economy, so called 'reshoring' looks set to play an increasingly important role in economic recovery.

Today's top headlines

Sponsored Video: Barings on investing in Frontier Markets


From Nigeria to Pakistan and from Kenya to Kuwait, frontier markets are catching investors' attention as never before.

More about this:

Archive

On the road

Click here to find out more from the Audience Development team.



Sorry, this link is not
quite ready yet