In Focus: 10 years of RDR  

'Clients do not mind if an adviser is restricted or independent'

'Clients do not mind if an adviser is restricted or independent'

The Retail Distribution Review's categorising of advisers as independent versus restricted had caused some commotion among advisers, but clients do not necessarily care about these distinctions, says Steve Gazard.

The chief executive of Quilter Financial Planning says clients are much more concerned about service, and ultimately outcomes, which could explain why nowadays the conversation has moved on to financial planning.

These days financial planning has become much more akin to life planning, he says, which is a trend he believes is set to continue.

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Speaking to FTAdviser In Focus, Gazard explains what effect the RDR has had on financial advice, and how the industry has changed for larger firms.

Steve Gazard is chief executive officer at Quilter Financial Planning






FTA: How do you think the RDR project has gone overall?

SG: The RDR was one of the biggest shake-ups to the financial advice market in the UK ever.

While the actual mechanics of an adviser seeing a client and providing financial advice haven't necessarily changed, the advice given, the documentation required, and business practices have all been affected by the change in regulation.

The professionalisation of the industry that we have seen and the requirements that now need to be undertaken to provide financial advice have undoubtedly been a success and helped reinforce trust with the industry.

FTA: The past 10 years have seen more advisers opt for larger firms and networks, which has been partly attributed to the RDR and the higher cost of doing business. How has Quilter responded to that?

SG: A good example of the above is the change in adviser remuneration. The move away from commission-based remuneration models towards a fee-based model continues to make the profession very different from its previous iteration.

This required a significant change in business models for many firms and could potentially lead to a reduction in revenue for firms that were heavily reliant on commission-based income.

Similarly, the RDR introduced a requirement for financial advisers to hold a minimum level of qualifications and to maintain their knowledge and skills through ongoing training and professional development.

While this is good for the industry, it represented a new cost for larger firms with more advisers, as many advisers had to undertake additional training and exams in order to comply with the new rules. This could be a challenge for firms, as it required a significant investment in training and development.

Ultimately, helping firms in their journey became a key requirement for us and helps to reiterate the support that networks can give advisers.

The RDR was such a big piece of legislation that we wanted to take as much of the heavy lifting away from the advisers as possible so that they could focus on implementing specific changes to their own businesses, while also continuing to give quality financial advice to clients with minimal disruption.