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

View the article online at

RDR: how can wealth managers overcome the challenges?

by Danielle Levy on May 06, 2011 at 14:05

RDR: how can wealth managers overcome the challenges?

Although the retail distribution review (RDR) has ensnared a large proportion of the wealth management community and presents significant challenges to businesses, the regulation brings with it a number of opportunities.

Advent Software's white paper on the RDR has highlighted what it sees as the key challenges and opportunities presented by the RDR alongside the best solutions to these challenges, particularly as the January 2013 deadline draws nearer.


1) Charging models - Advent anticipates that the move to the fee-based model is likely to result in three key consequences:

a) Cost transparency will result from the RDR, causing IFAs and consumers to become more price sensitive, which will mean that wealth managers will need to to demonstrate that they are offering value for money.

b) If commission incentives are abolished, wealth managers will have to work harder with advisers to get their services in front of clients.

c) As the RDR is likely to result in an exodus of advisers from the industry, wealth managers need to think carefully about which advisers they are partnering with and whether their businesses are likely to prosper or survive in the new regime.

2) Training costs - Advent highlights the enormous investment of both time and money in training if firms are seeking to comply with the new professional standards, placing what they describe as a 'significant burden' on wealth managers.

Advent points to JP Morgan Asset Management's review on the RDR, published in the Autumn of last year, which showed that only 9% of advisory staff at wealth managers surveyed were qualified in line with RDR requirements. Meanwhile, one quarter of respondents, all of whom were national firms, said that 75% of their staff would fall short of the minimum standards.

3) Higher staff pay - Raising professional standards and the associated ongoing training has long-term cost implications, Advent notes. By putting the focus on advisers' qualifications and skills, salary expectations are likely to grow, the white paper said.

Sign in / register to view full article on one page

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

Investing for income in a changing environment

With talk on interest rates on the horizon, our latest roundtable debate covers income investing against a changing backdrop

More about this:


On the road

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

Sorry, this link is not
quite ready yet