The RDR was introduced in the UK on 31 December last year, bringing into effect wide-ranging changes to the way consumers access and pay for advice. The RDR also introduces strict new rules on the qualifications needed by advisers before they are able to provide advice and new rules governing how advisers are able to describe their business.
Kevin White, managing partner of deVere UK, said now the RDR has been implemented, consumers need to be checking key facts about their adviser.
“The first question you need to ask is: Are you fully independent?,” said White. “Under the RDR regulations, an adviser will be classified as either ‘restricted’ or ‘independent’, so it’s important you ask which category he or she falls into.”
White added that deVere UK had opted to remain fully independent as it believes that “unrestricted, ‘access-all-areas’ financial advice is the best way for clients to benefit from financial planning”.
The deVere managing partner went on to explain that commission payments are now banned in the UK under the RDR and therefore consumers need to understand how they will pay their adviser.
“Before any advice is given, charges have to be made explicit and agreed, so the client knows precisely what they will pay and how they will pay it,” said White.
Last, White said consumers must be very clear on what they can expect from their adviser and should therefore ask: “What do I get for my money?”
“As clients are paying for an ‘ongoing service’, they should absolutely insist on regular reviews and proactive management of their investments from their financial adviser,” added White.
