What does it mean to be an “Independent” adviser?

RDR seeks to bring about a change in the financial services industry. From where I sit, change is needed.

A key issue that will affect Independent advisers, and is mentioned in the RDR consultation paper, is the definition of “Independence” so in this post, I want to explore the concept of Independence and check-in with you to see if there is any agreement on what it really means.

Continue reading “What does it mean to be an “Independent” adviser?”

RDR – Tackling adviser charging

RDR – Where to start with adviser charging


The big noise with RDR is the shift to charging for advice. It’s the bit that everyone is getting jumpy about. The thing is, it’s not as simple as replacing commission with fees. There are a whole bunch of things to consider, as anyone who has voluntarily made the move will tell you.

In this post I want to give you some tips on starting the process.

Before you can start thinking about how you are going to do this, how much to charge and how to collect it, you are going to have to get some clarity about some important things. If you skip this bit, you’ll be back doing it later. I promise you will… so don’t skip it! Continue reading “RDR – Tackling adviser charging”

RDR – Drug manufacturers should not pay ‘doctors’

It seems financial services is not the only sector being challenged by conflicted remuneration incentives between ‘industry’ and ‘profession’.

Last year, GlaxoSmithKline decided to change its procedures for paying doctors who could influence the distribution of its drugs. Some say it’s because the company is trying to be honourable, although cynics suggest the company has been caught out and has decided to make the changes before it gets forced to.

Whatever the reason, there is a trend in the world for professional advisers to be seen to be professionals, which means they can’t be remunerated by industry influence for product distribution.

What would the world of financial services look like, if financial planners and advisers could only dispense advice and could not sell ‘drugs’?


The Matrix has you!

 The Matrix has you!

You take the blue pill… the story ends, you wake up in your bed and believe whatever you want to believe. You take the red pill… you stay in wonderland and I show you how deep the rabbit-hole goes.”

A classic line from one of my favourite movies. The Matrix – if you don’t recognise it.

What the hell are we doing in financial services?

Is it just me, or are we living in the Matrix? A world which is controlled by powerful forces that don’t want you to see the reality. And many of us have bought into it

The Matrix has you!

The ‘machines’ are in control and are breeding us financial advisers and planners to use for their energy. No soul, no choice, no freedom.

As independent financial planners, we need to recognise that we can be part of the Matrix and tell our clients how to continue their illusory journey within it, or we can help to set them free by showing them their own reality… The truth!

It may not be pretty at times, and it sure is confusing, but the truth is surely better than illusion, right?

We need to turn this thing upside down. We need to do the opposite to what we’ve been taught. We need to trust our instincts, even if we are not yet confident. We need to take the hard path, because it’s hard. Better still, go where there is no path at all… because it’s the right thing to do.

It’s time to say “Enough!” and believe. Nobody else is going to do it. The machines won’t do it. Why would they? It’s up to us.

I’m trying to free your mind, Neo. But I can only show you the door. You’re the one that has to walk through it.”

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UK RDR – Some interesting numbers

South Africa is looking at the UK experience with RDR to try and glean some useful information about what it might mean here.

Stories abound about the devastating effect it has had on adviser firms and their clients. With this in mind, I was interested to see the research carried out by RS Consulting on behalf of the FSA (now FCA) into the impact on UK adviser firms. The reports are fairly lengthy and detailed, but I read them and have shown below a distilled set of numbers which I thought made for interesting reading.

RDR impact table

Source: RS Consulting April 2013 survey for FCA

It’s probably worth stating that these figures are based on a relatively small sample, but my ‘take’ on this is that the decimation of the IFA space never really happened, or at least yet. The reduction in numbers of advisers has largely been in the banking sector, and there is evidence of these advisers popping up in new places.

It will be interesting to see the next set of data and I hope the FCA continues to release it.

If these numbers are anywhere near right, then the picture seems to show that more people have joined a professional body, probably because the professional bodies offer access to statements of professional standing (a licence), more people intend to remain in the business and those that have remained are earning more money. Is a fallout rate of around 6-8% due to RDR such a high number?

If these numbers are accurate, then hasn’t RDR done what it set out to do?

And yes, I know you’re going to jump up and down and ask “What about the Advice Gap?” so, I’ll leave that one for my next post.

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RDR & 15 inch golf holes

The diameter of a golf hole is 4.25 inches. Did you know it’s been that way since 1891?

The story goes that the only tool available to cut a golf hole was 4.25 inches in diameter, and so that became the measurement included in the rules established at that time. Random, but that’s the way it is.

So it was with much interest that I read an article in the New York Times that proposes major changes, not only to the rules of golf, but the entire way the game is played. The reason for the proposed changes is due to a fear that the current game is too hard, too time consuming, too expensive and not enjoyable for many players.

It seems the world has changed, and golf is in danger of disengaging newcomers.

Sound familiar?

It is thought that by changing things, like making the hole 15 inches in diameter, golf will become more enjoyable and stop people from quitting the game. Some ‘traditional’ golfers are horrified by the idea. “We’ve always played the game this way. This is the way it should be played.”

I’m sure there are lots of people who would find the game of golf more enjoyable if they could putt to a hole that was 15 inches in diameter. My boys are 5 and 3 and are learning to play golf. They struggle with putting (don’t we all!) and I’m sure they would find it much more engaging if the hole was bigger.

This got me thinking. Why do all golf courses have to be +/- 7000 yards (sorry, I’m English) long, 18 holes, with a proshop at one end and a bar at the other? – wait… keep the bar!! – Why not give people a very short course, 6 holes, with no hazards, short grass everywhere and 15 inch diameter holes? It would be simpler, quicker, cheaper and more engaging, and maybe many more people would want to play.

I think it’s a great idea. My kids would love it.

But it wouldn’t work for me!

When I play, I want the original experience. I’ll get frustrated by missing 6 foot putts to a hole that measures 4.25 inches, but I reckon that’s part of the game. I’ll play on a ‘proper’ course with 18 holes. I’ll use a course plan, have a strategy and take advice from my caddie, because I believe that’s the best way to get where I want to get to. It will cost more and take longer, but I see value in it.

It’s a different experience for me.

It’s not right or wrong, just different. Maybe a simpler, quicker, cheaper experience would be better for the game. You might not want it, but it doesn’t mean others won’t, or shouldn’t have it, especially if that means more people engage with the sport.

I want my kids to have fun with the game and engage with it, because if they do, they’ll learn the rules soon enough, and maybe they’ll choose to get some proper coaching, when it will begin to matter, when coaching will make a difference to the game they want to play. Until then, they need a simple, cheap, quick and engaging means of accessing the game.

Any idea where I might find a 6 hole course with 15 inch diameter holes for the kids?

As a financial planning firm, who are you marketing your product to, and what do they want that experience to feel like?



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RDR – The Start, Not the End?

A recent article on Moneyweb asked whether South Africa’s incoming Retail Distribution Review (RDR) is the end of the IFA.

I think it was Mark Twain who said “The report of my death was an exaggeration” and the death of the IFA sector has been a recurring theme in the 30 years I’ve been in financial services.

And yet we are still here. There’s a reason for that.

Continue reading “RDR – The Start, Not the End?”