This page talks about RDR, the opportunity that is there for accountants and what they should do to make the best of it.
The recommendations of the Retail Distribution Review (RDR) came into force in the UK in 2013 and present a big challenge for financial advisors which is a great opportunity for UK-based accountants.
What RDR could mean for advisors
There is a widespread belief that many clients will simply not take up financial advice when they have to pay for it, even if they know that it will be cheaper and more open than the previous regime. RDR means the end of hidden commissions and front-loaded charges which reduced the value of customers' investments without them being aware of it.
This has created a negativity surrounding financial advice. Estimates of the number of people who will now go without financial advice, and who will avoid making their own investment decisions, are as high as 43 million (Guidance Gap Report: Fidelity Worldwide Investment & Cass Business School). The same report estimated the investible value of those people to total some £440 billion.
The opportunity for accountants
Accountants are in a position to pick up a significant amount of that £440 billion if they have the knowledge and tools to step into the gap.
As accountants already charging clients for their services, there's no cultural change to tackle. The only thing you will need to do is demonstrate that you can do more for your clients, helping them to manage their wealth, their portfolios.
The work can encompass cashflow planning, tax planning, life accounting, inheritance planning, risk management and obviation, and much more. You may already be doing some of this work already, but the PWA Association can help you take it to the next level. You will be able to deliver more to existing clients, charging more yet delivering greater value, and attract new clients who will add more value.
Note here that (in the UK at least) you will need to steer clear of giving financial advice. But you can ask about clients' existing provisions and future plans in order to help them manage their own affairs.
The association will give you the tools to ahieve this.
Who will be your clients?
Your initial clients don't have to be very high net worth individuals; you may have clients who are moving towards the high-earnings bracket.
They could be self-employed, or business owners, who might not yet have realised that they are building up something that will need different financial management tactics than those they've employed so far.
Once your existing clients experience what you are capable of with the PWA Association behind you, new clients will be drawn to your private wealth accountancy practice.