06 Oct IT Solutions Provider Warns of Advice Vacuum to be Caused by RDR
IFAs have been warned that they may need to prepare for an advice vacuum once the retail distribution review is put in place, at least if the IT solutions provider Mastek is to be believed.
The Head of Propositions at the company, Ralph Tucker, claims that new model advisers will focus even more of their efforts on high net-worth clients, believing them to be of higher value to them post-RDR, while other clients will be forced to deal with direct-to-customer models and restricted advice.
He claims that while such channels can generate business, IFAs would need to ensure that they are properly prepared.
Mr Tucker commented "Many organisations are still not grasping how seismic the RDR will be and the potential pitfalls and opportunities that exist as a result.
"Just ensuring compliance, is not a robust business model especially when you consider the opportunities presented by
the post-RDR market."
He claims that advice channels will need to become largely electronic and automated after the RDR is implemented, adding "Those preparing to change systems, processes and technology to improve their service offering will be the first in line to benefit from this potentially huge influx of new money, especially as service is set to become the new commission."
Kevin Morgan, managing director of Hertfordshire-based IFA Consilium Financial Planning, continued "It is important to pick up the opportunities presented by the RDR and to have our systems ready for the new regulation.
"We also need to use the technology to make our client proposition viable as soon as possible."