'Advisers are responsible for raising standards, not RDR'

'Advisers are responsible for raising standards, not RDR'

The advice industry is responsible for the rise in industry standards in the past 10 years, and not the retail distribution review, experts have said.

Speaking at a panel at FTAdviser’s Financial Advice Forum, Sarah Lord, chief client officer at Cooper Parry Wealth, said she is “on the fence” about whether RDR has actually driven professionalism.

“I think we, as a profession, have driven professionalism, rather than the infrastructure of RDR.”

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Tish Hanifan, founder of the Society for Later Life Advisers agreed, saying the standards were raised by advisers who used RDR as motivation to show how professional the industry was and is.

She said she founded the group purely because of how much she was in awe of financial advisers as a member of the public.

“I’ve been glad [RDR] has given advisers the opportunity to show how professional they are.”

Lord said there is a balance IFAs need to navigate between qualifications and experience from the day-to-day practice in the job.

“Some people do not necessarily want to further their education or get higher qualifications, because they feel that they had that knowledge from [their] practice.”

She added that she has seen a drive in more individuals wanting to be chartered, whether that’s a chartered financial planner or wealth manager.

“Now we have nearly 1,000 chartered financial planners [which is] a significant improvement.

“That is because people want to achieve it for themselves, not because the regulator brought in RDR.”

Pension reforms

Discussing the auto-enrolment reforms, Hanifan said there was a lot more engagement that needs to be done around pensions.

This is twofold, she said, firstly it is enlarging the number of people who have been auto-enrolled, and secondly it is those people engaging with their pensions.

“You need the hearts and minds of people that are involved, and employers needs to do a lot more.”

She said since the reforms have been implemented, there has been a lot of research to show that although lots of people are now auto-enrolled in their pension, not all of them understand what that means. 

“It is a great building block but there is lots more to do.”

Lord added that the reforms have helped employers engage more on behalf of their employees, and has provided more support to them. 

However, she said there is still a proportion of the working population that are still excluded.

“There are a lot of people these days who are self-employed, or on zero hours contracts, and there’s still a big proportion of society who do not benefit from the compulsion [to save].”