We are but days away from an event that has been seven years in the making – ever since London was awarded the 2012 Olympic Games back in July 2005 it feels like we have been waiting for the Opening Ceremony that kicks the whole thing off on Friday. Without wishing to puncture any balloon of positivity that exists around the Games, one can’t help feeling that the whole thing had better be worth it or we could be left thinking why we spent so much time and money on it.
Many in the advisory community may have similar feelings when it comes to the RDR – another ‘event’ that seems like it has been with us forever and only now are we finally within touching distance. Much like the Olympic killjoys would like the whole thing cancelled and removed to another country, a number of advisers appear to be still expressing the ‘let’s call the whole thing off’ sentiment even if the basics tenets of the RDR are sound and it should deliver a much more professional and qualified advisory service sector post-2012.
So with RDR a little over five months away, I was slightly disturbed to see some recently published research by MyTouchstone regarding RDR readiness, or in this case, RDR lack of readiness. The top line results of the survey of over 1,000 advisers revealed that just 15.3% of those questioned could said to be ready for RDR with 79.3% still obtaining a quarter of their income through commission. In terms of one of the other RDR ‘fundamentals,’ just under 60% of firms surveyed said they had at least one adviser qualified to QCF Level 4, while just over 30% of firms said all their advisers were qualified to at least this level.
I’ve always thought it was important to take such surveys with a pinch of salt, particularly when it comes to RDR because, as MyTouchstone itself points out, many firms will be flipping the final transition switches much later in the year. Therefore, one perhaps wouldn’t expect complete RDR-readiness from the majority of firms and there is a very good reason why we have deadline dates in the first place so that practices can prepare and build up to January 2013.
However one can’t help but feel that a number of those firms surveyed will be far from ready to ‘flip a switch’ this November/December particularly in the area of qualifications given the time it can take to ensure an adviser has the necessary study and exams under their belt. In our line of work we have met literally hundreds of firms and many of them show all the signs of being unable to get themselves ready in time by the deadline and are therefore looking for external support and help in order to help them to the necessary place.
For those who may not be in the best shape at present, like Olympic athletes preparing for their event, one can only hope there is a huge level of work going on behind the scenes in order to be in perfect condition come the big day. One suspects however that a number of firms will find themselves hamstrung when the day of reckoning comes and will be having extreme difficulty getting to the start; let alone getting off the blocks.
The positive for such firms is that we are still months away from the end of the year rather than but days away from an Olympic event. There is still time for those firms who are not where they would want to be RDR-wise however there must also be an acceptance that there is undoubtedly a lot of hard preparatory work required. Given the bare facts of the matter it is perhaps not surprising that we have seen a spike in firm enquiry levels and I’m sure businesses in our line of work are experiencing the same increased interest. We cannot put off the inevitable and many in our line of work appear to be coming to the same conclusion – given this outlook one suspects a noticeable increase in M&A activity will be one major theme of the coming months.
David Hesketh is Group M&A Manager at Perspective Financial Group Ltd