The Retail Distribution Review has changed the makeup of the financial advice industry as higher qualifications were ushered in and many advisers reassessed their future careers.
One of the most interesting changes, according to Andrew Cullen-Jones, director of business development & advice at St James's Place, was the shift in bank advisers moving to set up their own firms.
There was also the growth of multi-adviser practices and firms building more extensive back office operations and hiring further support staff within their businesses.
But despite this, the industry is still facing an adviser shortfall, especially as large numbers of advisers are nearing retirement, Cullen-Jones warns.
When it comes to charging for advice, which also saw some big changes under RDR as commission payments were banned on retail investment products, it is important to understand that charges are only one side of the value for money equation, says Cullen-Jones.
In a Q&A with FTAdviser In Focus he talks about the changes SJP made early on in its preparation for the RDR and why he believes the firm's charging structure is and always will be RDR compliant.
FTA: Looking back, what's your overall assessment of the RDR and the way it has shaped the industry over past 10 years?
ACJ: The RDR has undoubtedly had a positive impact overall on the advice industry, raising standards and improving professionalism through the introduction of increased qualification requirements.
In the 10 years since its introduction, the profile of the profession has made significant progress bringing it on a par with other highly skilled professions where prolonged training and qualifications are a pre-requisite of the role.
Suitability levels are a clear indicator of its success and the FCA’s last formal review showed 93 per cent of advice across the industry as being suitable, with the FCA concluding that the results were a direct result of the “successful adoption of RDR by advisers”.
The one downside has been the reduction in the number of advisers across the industry. We saw a large number of financial advisers exit the marketplace around the time of its introduction and levels continue to remain stubbornly low.
Given the undoubted benefits financial advice can provide for clients, the injection of new advisers and the closing of the advice gap could play an instrumental role in helping solve some of the societal challenges the UK is currently facing.
This includes the simple fact that, at a macro level, UK households are not saving enough or making adequate provision for retirement.
FTA: What's the most 'interesting' thing to have come out of the RDR?
ACJ: With a number of bank advisers in particular becoming displaced, this presented an opportunity for those who wanted to carry on in their capacity as a financial adviser to become their own business owners.