Retail Distribution Review

Written evidence submitted by Alan Smith, Capital Asset Management Plc

I run a boutique financial planning and wealth management business providing regulated financial advice to private clients and SMEs.

As practitioners we are firmly in favour of the key recommendations within the RDR and feel strongly that it will serve to increase the publics’ confidence in the services provided by firms such as our own.

Certainly it will require further work to ensure all advisers have attained level 4 qualifications but we are keen to embrace professional development and recognise the potential impact on advising the public on matters relating to their life savings. This is not a task to be taken lightly and in my personal experience, simply claiming to have been adviser for a period of time should never exempt one from proving skills and knowledge through accredited examination and ongoing CPD.

Furthermore, the removal of payment from a third party (i.e. commission) significantly improves the integrity of the advice offered – in simple terms if the only way I can be paid is to sell a commission bearing product (rather then, for example, pay off debts or buy NS&I products) then the advise is highly likely to be swayed towards the sale of the product.

By asking the client to pay – for true, impartial advice, I am free to give fully considered opinion of the ‘what would I do if I were him’ style –  the advice is truly unhindered by conflict of remuneration.

Finally the capital adequacy rules are long overdue and will go some way to ensuring a more financially robust and solvent sector – sadly all too lacking.

I suspect that our views are similar to the majority of progressive, ethical practitioners, although most of us have remained quiet while those who, through personal vested interest, seek to reject RDR are making all the noise. RDR must proceed and bee seen as the first stages of a continuing improvement in the quality and reputation of retail financial advice in the UK.

December 2010