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By Donia O'Loughlin | Published Jun 29, 2012

‘Only sign on the door will change’: Alan Lakey’s RDR plans

It would be fair to say that Mr Lakey is not a fan of the RDR, but like all other advisers he is adjusting the way he works to ensure that he is compliant with the incoming regime.

Mr Lakey has been in the industry for more years than he would care to remember - probably. He says he has seen regulation in the industry change and regulators change, but despite much talk in the wider industry post-RDR he says one thing that won’t change is his business model.

In spite of this, he is firm in his belief that the RDR is the worst thing that has happened to the industry and will not achieve the objectives set out in 1996 by former FSA chief executive John Tiner and former FSA chairman Callum McCarthy.

“They said they wanted transparency so consumers could see the value of what they were buying and they also wanted greater trust in the industry.

I’m doing the Chartered Institute of Bankers exams. If you do a multi-choice exam the answers can be so bizarre that even though you know the answer you think it could be two or three

“They suggested that this would ensure that more consumers engage with the industry as McCarthy thought the distribution model was broken. I did not and still do not agree with what he said in terms of the reasoning behind the RDR changes and I do not believe it makes sense.”

Exam choice

Much of Mr Lakey’s work falls in the protection and mortgages arenas, both of which do not fall under the RDR, but he also advises on investment and retirement products, which does fall under the RDR’s remit. FTAdviser asks him what he has been doing to ensure this part of his business is compliant.

“To carry on doing investments, annuities and pensions, and whole of life protection policies and Holloway society income protections, I have to be qualified. And I have my exam in four weeks time which I have been studying for since January.

“It’s a three and a quarter hour case study. I’m doing the Chartered Institute of Bankers exams, which I’ve chosen because it’s the one that best suits the way that I think.

“If you are given a multi-choice exam, which in many cases you are, some of the answers can be so bizarre that even though you know the answer you think it could be two or three of them, so I prefer to do the case study.”

Mr Lakey says his studying is forcing him to learn about direct investment in shares, unregulated collective investment schemes, drawdown and FSA’s ethics viewpoints, none of which he says will benefit his business or his clients.

“This doesn’t benefit me. Essentially it’s like asking me to take a HGV exam so I can continue driving my Cleo.

“In 2007 Joel Redwood said the RDR was a sledgehammer to miss a nut and that sums it up. The cost of the RDR is £6bn over 10 years. Yet I will be doing exactly the same job as today with not one iota of difference.”

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