According to a recent study only 14% of the current income flowing through IFA businesses is on an adviser charging basis.
This suggests that IFA’s are far from ready for the RDR.
In addition a recent trade report suggested that several thousand IFA’s would be leaving the IFA arena before the end of 2012.
This is RIDICULOUS!
The big push from “the Industry” over the past year or two has been around qualifications and making sure that IFA’s have the right qualifications to get into 2013.
However we believe that this has hidden a giant elephant that has been sat quietly in the room all along and in reality represents the real challenge, threat and – if dealt with – opportunity for any IFA.
And the elephant is?
THE “BUSINESS MODEL”.
This is not just about RDR – it is also about the general change in the world at large, the economic back drop, the consumer, the internet and much more. The RDR is forcing change by legislation, but industry and economic change is occurring anyway.
IFA’s will not survive this change unless they change their business model and in our view not one major industry leader has properly got to grips with this. Our view is this: the future is already here. It has arrived and hardly any IFA has noticed or reacted. The result of this will be that many will suddenly find that they are out of kilter.
If you don’t think that rapid, dramatic change can happen to old or well established businesses then you are ignoring:
How HMV and Blockbuster came unstuck against more modern competitors, how most of the traditional airlines all went bust when they ignored and attacked the cheap start ups that appeared when the Open Skies policy was introduced (sound familiar Open Skies – RDR?) and how Banks tumbled when they ignored their conventional standards in managing their businesses.
Some of these examples may not directly correlate to the change you are about to face, except to state that Businesses ignore the pace of change at their peril.
The future for IFA’s and the IFA industry is here NOW and it looks like this:
the model will be fee paying
every step of the process will be chargeable
traditional products will largely become defunct
consumers will want full transparency
advisers will be process driven
advisers will provide a demonstrable service
the order of importance will be client-adviser-provider not provider-adviser-client
advisers will go out of business not through FSA enforced measures but through commercial errors i.e. failing to react and change quickly enough
the internet will be at the centre of everything
RDR is now a reality, less than 365 days away. Our crash course will get you to the change point – ready and adjusted to the new reality AND READY TO PROSPER.
