IFA admits RDR anger has left revenues down 40%
Sole trader says while he does not agree with new rules, they have “given the old dog a new lease of life”.
An IFA has admitted that his company’s revenues have seen a 40 per cent decline since last year as he is studying to attain his qualifications in time for the Retail Distribution Review deadline, which he says he will not meet due to allowing his anger at the new rules to delay preparations.
In an interview with FTAdviser, David Chubb, principal of Sussex-based David Chubb Financial Planning, stated he is currently studying for the Chartered Institute for Securities & Investment’s level six exam on private client investment and management.
By his own admission, Mr Chubb only started studying earlier this year due to health issues - but also resentment that “at my age” he had to go down the qualifications route. He added, however, that since embarking on his exam journey he has been given a “new lease of life”.
He said: “To be honest with you, initially I had to get over anger and resentment that at my age they were pushing me down that route although, having said that, in some ways I am glad they have.
“Although I think the FSA has handled this very badly as they didn’t give it sufficient thought and I feel that it isn’t in the wider public’s interest, this is giving me a new interest by doing something new. The FSA have forced me into this but it has given the old dog a new lease of life.”
Mr Chubb said he is taking a “tougher route” than he might have done but stated that he needed to find a qualification route that he was interested in. He said he told his clients what he was doing and why and that in the main they have been “very understanding” about the situation.
He said: “My clients have been very forgiving. I have dealt with urgent matters but anything that is not urgent I have put off. It has affected my earnings terribly.
“What I did do is underestimate how long it would take as it’s a level six exam and 80 per cent of it is new to me such as derivatives.
“My income has fallen while I’ve been dealing with this – probably about 60 per cent of what it was last year, so it’s low and I’m relying on my residual income which isn’t enough.
“It’s tough and the cost to me, as a sole practitioner, is enormous, and I would then say that I must be bonkers as how many working years of my life have I got to repay my investment and opportunity cost.
“How many years have I got left? But on the other hand what else do I do? Do I end up working in B&Q?”
The full interview with Mr Chubb, part of FTAdviser’s ongoing series on financial advisers’ RDR readiness, will be published later today.