Regulatory change ‘drives costs up’; Liversidge’s RDR plans
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It would be fair to say that Neil Liversidge, managing director of Castleford-based West Riding Personal Financial and Association of IFA council member, is not a great fan of the incoming Retail Distribution Review.
Although he believes it will not benefit the end consumer he has had, like all other IFAs, to ensure his business is RDR-ready by the end of the year.
West Riding consists of five people including Mr Liversidge, but as he is the only one that gives advice, he is the sole person who has to be study to ensure that he is up to the mandatory level four qualification standard for the RDR. Bar the qualifications aspect it seems the firm has pretty much been RDR-ready since it was set up in 2004, despite the fact that the RDR had not yet been mooted.
“We became fee-based in 2004 as I had spent 24 years working in this industry and seeing what a lot of the things people did and not liking it.
“When I built my own firm I decided to engineer out all the things that I didn’t like such as churning, so there is no incentive to churn in our model; people who sell it and forget it – there’s a definite incentive in our system to stay in contact with the client and provide them with an ongoing service.
“I built out product bias as we get 3 per cent whether it’s a bond or an investment trust, or a unit trust. So none of these figure in the firm.
“Client contact does figure, I just basically tried to make the firm to be the kind that I would want to deal with if I was the client.
“Nobody had thought of RDR in 2004, it was sort of 2006-ish when it was first mooted.”
This has certainly benefited Mr Liversidge as by his own admission only the qualifications aspect has been stressful, and the firm is otherwise RDR-ready.
“We will have a few things to do with documents but it is minimal so for all intents and purposes, we are RDR-ready, and the fee-model that we have ran since we set the firm up in 2004 matches RDR perfectly.”
Mr Liversidge has achieved a diploma from the Personal Finance Society, done his gap-fill and has also obtained his statement of professional standard. However, he admits he would rather have done this on his own timetable rather than the FSA’s considering that he also has a business to run.
“The qualifications aspect was yet another bit of strain. When you run a business you have a lot of things to do and I had always intended getting more qualifications anyway but it was just a bit of extra stress and strain that I would be better off without and I would rather have done it on my timetable and not the FSA’s timetable.”
Independent vs restricted
There has been much debate about IFAs’ status post-RDR on whether advisers will be restricted or independent and what it involves, with the FSA constantly issuing further clarifications.