'There was talent that could have been harnessed and instead it was lost'

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'There was talent that could have been harnessed and instead it was lost'
ByCarmen Reichman

The IFA businesses who had started to change their fee structure in the years preceding RDR were better placed to make the transition and continue to grow their business model, but many practices had not evolved to this model and so the transition was complex and costly, which inhibited their growth while they restructured their operations. 

FTA: What did these changes mean for your recruitment business?

RF: As a recruitment business we had been heavily involved in supporting the then sizeable bancassurance marketplace and its growth and in building their adviser and management teams.

We as a business also had to restructure our model and navigate to supporting the independent marketplace and helping as many advisers as we could transition the change in their own career paths while helping the independent practices take advantage of the influx of clients and bancassurance advisers into that space.

A lot of bancassurers went to work for networks. Although a lot succeeded, many failed and these advisers were soon back on the market.

Around this time (2012-13) we also saw the start of the large consolidations that we now see happening the industry over with new consolidations happening every week.

Indeed it was a time where businesses needed to embrace the changes and find their opportunity from it. 

FTA: Are there any unintended consequences caused by the RDR that are still being felt today?

RF: RDR altered the landscape of the market, and banks and life companies pulling out of the market removed those adviser breeding grounds, which has consequently meant that there are fewer avenues to market, which has led to the huge adviser shortage we are currently experiencing. 

The focus has switched to the gathering of assets, which interestingly, we could say is counter to the rationale behind RDR, which was all based around putting the consumer first.

FTA: How has the makeup of the recruitment industry changed as a result of the RDR?

RF: As a recruitment business working in this industry we are focused on two areas, one is supporting the large tied (or restricted players) in the ongoing recruitment of their employed advisers to help them service and look after their clients, and the other is working with networks and other acquiring financial planning firms on the acquisition of assets under management. 

The salaries for experienced, competent, well-qualified advisers is going up and up and this is making it difficult for smaller businesses to continue to compete.

We, as recruiters explore the adviser's needs for their clients alongside the needs they have as an adviser and pre-RDR this was not something that recruiters got too involved in as advice was more transactional.