I’m up in Arbroath (on the east cost of Scotland) for Christmas this year. Before setting off we decided to check the weather and pack accordingly. It’s never particularly warm in Arbroath (especially in December) but the predictions of rain meant that we packed accordingly.
We started our journey in the early hours on the 21st of December and it was only whilst reading the paper on the way to the train station did I realise that the supposed ‘end of the world’ was upon us!
There were stories of people congregating around Bugarach in Southern France and Sirince in Turkey (apparently two of the only places safe from Armageddon!) in preparation for the apocalypse, a photo of a man sitting in an inflatable dinghy in preparation and quotes from people about the ‘end of humanity’.
Reading these stories initially made me chuckle. But then it got me thinking. Is the way some of the advisory community’s reaction to the upcoming RDR changes not dissimilar to the attitude taken by many of the purveyors of the ‘end of world’ prophecy?
There has broadly speaking, been three distinct schools of thought amongst advisers in relation to the Retail Distribution Review.
There were the individuals who believed that RDR would destroy their businesses or advisory careers as well as fundamentally changing the face of Financial Advice as we know it.
There were the individuals who believed that RDR would never happen….
…and there were individuals who decided that the RDR was going to happen and as individuals (and businesses) they needed to prepare for the changes but as long as they prepared sufficiently made they would survive and thrive far into the future.
Most of us were never under any doubt that the predictions of the Mayan apocalypse were wrong….and I firmly believe that the advisers who decided that RDR would destroy UK financial services are wrong too. Whilst I’m sure that RDR will have an impact (especially for the unprepared) it won’t be fatal for our profession.
RDR was never going to be apocalyptic and for one reason. Clients continue to need us to help them….and my personal experience is that clients are more than happy to pay for that help. Unless that simple fact changes our profession will be in good health for a long long time.
However there’s no doubt that RDR was a change we needed to prepare for. Whilst far from Armageddon it did involve many of us looking at our businesses and ensuring that we had the right qualifications, practices and standards in place to ensure sustainability. Advisers (and practices) who thought ‘it would never happen’ and haven’t made the required changes will suffer.
However RDR has been on the cards for a number of years so I’ve no sympathy for advisers who have chosen not to (and have had plenty of time to) prepare. It’s like me travelling to the North East of Scotland for Christmas, knowing rain and cold weather was expected, armed with just a pair of Bermuda shorts, some sunglasses and a surf board.
The advisory practices who will undoubtedly thrive post RDR are the ones who have taken a measured and sensible approach. They understood how RDR impacted them specifically, planned for the changes within their own business and took action to ensure they were ready. They ignored the ‘end of the world’ merchants and the ‘it’ll never happen’ commentator and just got on with it…