Regulation  

Nobody could be ready for the RDR ‘changing canvas’

“That said, he has remained in the industry as a paraplanner/administrator. He doesn’t want to leave the industry as he loves and enjoys the industry very much, but he wasn’t prepared to go through taking qualifications in his late 60s.”

Despite this paraplanning connection, Mr Dodd is cautious on another RDR consequence predicted by many that there will be a boom in the use of paraplanners post-RDR, as he argues that they are too expensive for the majority of advisers.

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“They are obviously providing a very valuable service to IFAs but if a paraplanner costs almost as much, if not as much as an adviser, advisers need to consider if this is financially viable.”

Do clients value advice?

Continued consternation over the RDR exists in relation to the move to fees. For Mr Dodd, this has not proved a problem; the firm moved to a fee-charging basis five years ago and he says it has not encountered any issues from clients.

“The fee issue for a lot of advisers is in their heads rather than client resistance; it is about how you have that conversation with people. If people don’t want to pay a fee, they clearly don’t value the advice they are getting and I would suggest that anybody who doesn’t value the advice that you are giving shouldn’t really be in your client bank.

“We spoke to clients about the RDR and they reacted largely positively in that they understand that we should be paid for the work that we do and I can only say that there wasn’t any significant resistance, provided that we explained it correctly to people in a way that they could understand.”

Mr Dodd is of the view that ongoing advice is “absolutely critical” and represents the key value-add for clients.

“Our industry and our profession as we should now call it has long given pseudo advice, but it’s been very front-end based and you could hardly call that advice really. An initial fee for a lot of work done in the beginning is fair, but the critical success to any financial plan is ongoing advice. Without that, it isn’t a plan.”

Like the majority of the industry, Mr Dodd chose to remain independent, highlighting that that is the way the firm has always operated and that it resonates with clients.

“We wouldn’t want to stray from that unless we absolutely have to. The term restricted is not attractive and it has either been very poorly chosen or very well chosen, whichever side of the fence you sit on but it’s not a term we like the sound of at all.”