Launched in 2006, the RDR was originally tasked with encouraging retail customers into savings and investments and planning for the future. With the onset of the financial crisis, its focus shifted towards a number of underlying weaknesses in the UK financial advice market, including professional standards, advisor remuneration, and service closure.
Analyze the current RDR situation and how its more pressing secondary impacts have affected the UK HNW wealth management community.
Interpret RDR trends within the industry using Verdict Financial's 2013 Global Wealth Managers Survey.
Understand the challenges facing UK wealth managers and how to react.
Assess responses to the RDR from industry peers using company-specific examples.
Understand the reactions of UK HNW individuals to changes brought about by the RDR.
How is the competition reacting to the RDR?
What are the key challenges facing UK HNW wealth managers?
How can a UK wealth manager react to the IFA market upheaval?
How have HNW clients reacted to the RDR?
What is the future for UK wealth managers and the RDR?
The RDR was never designed to directly target the core of the UK wealth management industry: the HNW individual. As such, the primary impact of the RDR has landed squarely on the mass market. However, secondary impacts have surfaced which pose significant challenges for the wider wealth manager community.
Responses from wealth managers have been largely two-sided. Outsourcing can highlight company focus, but there is also an opportunity in offering third-party administration services. The IFA market still offers healthy expansion opportunities but also provides a lower threshold market, into which less lucrative client books can be divested.
There is no set path for wealth managers and the RDR. Firms seeking to target the market polarization may have very different plans to those planning to outsource. Change will be driven by the ongoing quest to demonstrate value and avoid a downward fee spiral, encouraged by newly price-sensitive HNW individuals.