When the Financial Conduct Authority introduced the Retail Distribution Review in 2012, it aimed to restore consumer confidence and ultimately repair the industry’s tarnished reputation via a public commitment to sector-wide transparency.
The salesmanship approach that came to define financial advisory services in the 1980s and 1990s – and the numerous scandals that followed – gave the industry a bad name that proved hard to shake.
The RDR promised to hold businesses accountable for maintaining professional standards and, in doing so, banish the days of style over substance for good.
As a longstanding advocate for training and development, I have always believed in going beyond what is required in the pursuit of excellence.
From qualifying as a chartered financial adviser, to championing the members of my team to do the same, I know that accreditation is a highly effective indicator of expertise and experience in the mind of the client.
As a firm, our ongoing commitment to professional development was recognised last year when Everlong Wealth became a chartered financial planning company with the Chartered Insurance Institute.
However, with only about 15 per cent of financial advisory companies in the UK holding the same achievement, there is still work to be done within the industry to demonstrate the importance and value of accreditation.
There is no doubt that the RDR has raised standards across the financial planning industry. Through RDR, the FCA has addressed the lack of training within the sector and raised standards of service to fulfil client needs.
Additionally, it has given financial planning as a discipline the legitimacy it deserves and elevated the profession as a whole, bringing it in line with other financial services.
Financial planning has become unaffordable for many
Although the impact has been overwhelmingly positive, the RDR has raised issues as well as resolved them.
The higher calibre of advice and service that is now demanded of the industry comes at a price, which has left the vast majority of the UK population unable to afford financial planning.
Arguably, this excludes many of the people who need our services the most. With the effects of the cost of living crisis and recession felt nationwide, the issue of service accessibility will need to be addressed sooner rather than later.
Another issue the RDR has brought to light is the inferiority complex that lingers within the industry.
Losing the false sense of inferiority that many financial planners still have when comparing themselves to accountants and acknowledging the unique, life-changing value we bring to clients through our work is essential for future success.
The financial planning sector is relatively young and we still have some way to go in becoming a truly respected profession.
The past decade has been a positive move forward, but the UK industry remains 10 to 15 years behind the US and Australia.
