RDR qualifications requirement is ‘red herring’

David Howell, chief executive of international IFA firm Guardian Wealth Management said the qualifications piece of the RDR was simply a part of lifting professional standards and was never the key aim of the regulations. Indeed, he said that qualifications should be a “given”.

Instead, he said that advisers needed to concentrate efforts on generating reliable fee income, acquisition of clients, the cost of acquisition of clients and client service proposition. This, he added, could result in a “scramble for high net worth clients”.

Mr Howell said: “The qualifications thing is a ‘red herring’. The purpose of the RDR wasn’t necessarily qualifications. The purpose of the RDR is transparency and qualifications was just part of lifting professional standards.

“The main fallout of the RDR will be whether financial planners, be it certified or chartered, are ready as businessmen and women to run a post-RDR model and is it sustainable.”

Mr Howell highlighted that financial planners will have to ensure their business is robust enough to be in business in five years time, focusing in particular on their “sustainable” integration of technology, outsourcing investment proposition and platforms.

He said: “If you look at accounts and lawyers, it is a given that you do your study... but is that law firm or accountancy firm sustainable as a business unit in terms of its overheads, client service proposition and its delivery?

“I think post-RDR, successful businesses that will be around in five years time will be looking at fee income, acquisition of clients, the cost of acquisition of clients and client service proposition and they will need to examine how it will be delivered.

“That is where there’s possibly going to be a scramble for high net worth clients.”