93% of IFA clients do not understand RDR:
Posted on:
24
Jan
2012
by James Cholmondley Farmer
FSA and AIFA must lead the charge in educating the UK’s consumers:
PanaceaIFA reveals that 93.5% of IFA clients do not understand what the RDR is and 60.5% of IFAs need help educating their clients on its impact ahead of the December 2012 deadline.
PanaceaIFA has surveyed their community to see what IFA clients attitudes are to RDR. Alarmingly, only 20.3% of IFA clients know and understand that they will have to personally pay for IFA services with no commission option being available. Also, 84.9% of IFA clients do not understand the difference between the new interpretation of independent and non-independent advice. All the results, from over 740 IFAs can be found here.
Further key statistics:
93% of clients would prefer a commission choice to remain available
90% of clients find face to face time and experience of most value compared to 1.1% who see qualifications as important
94% of IFAs said they had no confidence in AIFA influencing the FSA any more
75% said that the removal of trail commissions by way of a ban would deliver a death blow to their business
Derek Bradley, CEO of PanaceaIFA comments:
“This survey is not an attempt to derail the RDR process. It’s about preventing further detriment to the consumer rather than creating more. On all counts it’s clear that what the RDR will produce for the ‘consumer market’, unless some sense of reality is brought to bear, will have the most spectacularly negative impact caused by a regulator since the OFT decided that the MCA (Maximum Commission Agreement) was anti-competitive.
“The results of the survey are so alarming I must ask why the FSA have not conducted similar research with IFAs or their clients. Why are there still no visible plans to educate the public about RDR?
“Consumer attention is already diverted with current domestic economic matters as they are and this research reveals the core problem of awareness. For example, campaigns such as the compulsory wearing of seatbelts or informing the public of the digital switchover seem to work in
creating awareness. Therefore, a sponsored message from the FSA, not from provider firms or IFAs, telling the public ‘this is how it will be in future’ will also work.
“However, the negative impact of the RDR on the consumer market in 2013 goes unchallenged. No doubt Mr Sants will argue that creating awareness is a job for the Money Advice Service but that appears to be setting itself up as some kind of honest broker service and I am not convinced it has the teeth to tackle this issue.”
Tags: IFA | rdr
