RDR Transition: Innovation is key to survival of IFAs

Neil Chamberlain, director of Worldwide Financial Planning, is passionate about independence, a stance he attributes to his legal services background.

Despite the moribund attitude promulgated by many as a result of new requirements for IFAs under the Retail Distribution Review that many see as prohibitively onerous, Mr Chamberlain believes that firms who are innovative can deliver efficient and effective independent advice.

He adds that he feels protecting independence is important, as it is only advisers with the breadth of perspective of an IFA that offer the education required for clients in this climate.

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WWFP has been around since 1988, although Mr Chamberlain did not join the firm until 2001.

“It was little more than a corner shop then with a few advisers who had all come from a direct sales background. Coming from a professional background in the legal game, I kind of recognised that the environment needed to change.

“It needed more bricks in the foundation and a few pointers to align the outlook and the view of everybody. I am passionate about independence, obviously coming from working with solicitors.

“We deliver the advice and the education and that value can only be delivered in the independent sector and not the restricted sector.”

Innovate, don’t exclude

Mr Chamberlain believes that the Retail Distribution Review is more than a change in the regulatory environment, but is also a change in mindset for the industry.

In particular, he cites the need to move away from a transactional sales approach, which he says the vast majority have not yet achieved.

Mr Chamberlain says: “About 85 per cent of this industry sell things, they don’t advise. Unfortunately I think that’s where also the regulator has to flip its idea of what independent advice is; it’s not selling products to people.”

Like others in the industry, he admits that one unintended consequences of the RDR is the advice gap, but believes that the sort of innovation firms must show to survive can be used to bridge this.

“As a firm we need to continue to employ a competitive strategy in the marketplace and the RDR is actually an evolution.

“Independence and inclusion are an evolution, as you need to be innovative to deliver something of value to the needs and wants of that excluded market from an independent advice consideration, rather than let an excluded market stagnate or make choices of little value.

“If you just focus on a particular market, then one of the consequences of the RDR is exclusion.”

One key element of the survival of independence, he says, is the perception that IFAs must understand “everything” about every viable product in the market.

“Rubbish. Absolute rubbish. The fundamental considerations are basically what are the key things that we do and we manage people’s risks.”

However, Mr Chamberlain admits that an understanding of what goes on below the supposed features and benefits is needed.