IFA firms are already making redundancies in Scotland thanks to the RDR
If you're an independent financial adviser (IFA) working in Scotland, you have reason to fear the impending deadline for the FSA's retail distribution review (RDR) regulation.
Last week, Co-operative Financial Services in Scotland revealed that it was letting 110 financial advisers go as a direct result of the regulatory pressures arising from RDR.
The RDR aims to increase the standard of financial advice being given to consumers and prevent the mis-selling scandals that have dogged the IFA community in recent years.
On the one hand, this means IFAs have to show they have the right qualifications - and meet the QCF level four before the December 2012 deadline - but it also means higher regulatory costs for employers.
Last week, a wide-ranging Treasury Select Committee (TCS) report looked to have thrown a lifeline. It suggested extending the RDR deadline to December 2013 in order to allow IFAs to get qualified and prevent a huge fallout from the industry.
Experienced IFAs, in particular are taking umbrage to the suggestion that they need to be more qualified. In the TCS report, IFA Jason Georgiou said:
"I have been in the industry for 30 years now, had no complaints and keep my knowledge up from both my experience and ongoing CPD. I have started studying to the level of RDR already but with great reluctance. The cost with my examining body, IFS, is 600 but it is not just the monetary cost which I consider to be excessive but also the time that will be required to complete the studies and examinations. I would expect it will take in the region of 100 hours to study information for an exam which will be nothing more than a test of memory rather than aptitude for the job."
Unfortunately, the FSA has since dismissed the TSC proposals and says that 49% of IFAs have already met qualifications, while 82% intend on remaining as retail investment advisers.
In Scotland, the looming RDR deadline is becoming a real concern, and financial services recruiters suggest that increasing numbers of IFAs are coming to them looking for a career switch.
"The problem is finding a viable alternative for them," says one recruiter who declined to be named. "Compliance is a route that a lot of advisers are taking, and then there's anything related to sales. However, in the current tight job market specific experience is required and a switch isn't easy."
Many are just leaving the industry entirely. According to figures by Matrix-data Solutions, there were 32,000 advisers in 2008, a figure that slipped to 28,714 by June 2010.
