Recent figures published by the Financial Services Authority indicate that the number of firms authorised to dispense financial advice has fallen for the fifth consecutive quarter. This is no surprise to us at Proposito Financial Planning as we identified a fundamental flaw in the traditional IFA business model many years ago. As a result we made significant and difficult changes to our modus operandi that have placed us in the enviable position we’re in today. This means we are well placed to meet the new standards being laid down by the FSA as part of the Retail Distribution Review (RDR). The RDR was launched by the regulator in June 2006 as a response to perceived problems within the retail financial services sector. It’s aim has been to increase the level of professionalism within the industry, including changes to the way advisors can be remunerated as well as setting down minimum qualification levels. On March 26th 2010, the FSA published a policy statement containing the draft final rules established by the RDR. There were no surprises for us, however for those IFA’s who have continued to follow the traditional model of working, they will now be forced to embrace change or leave the industry as the clock counts down to implementation day in December 2012. We eventually reached the conclusion that we needed to provide our clients with a more holistic and ongoing service . It became apparent that unless we eliminated our reliance on commission paid by product providers for selling their wares we would never be able to provide a regular and optimal service to all our clients. We would get sucked deeper and deeper into the ultimate vicious circle, an endless spiral of client acquisition in order to generate sufficient commission income to cover the cost of servicing more and more existing clients. We decided to break this vicious circle in May 2005. Ever since we have been a fee only practice. Having relinquished our reliance on product providers for our income (our clients pay us directly for the work we do for them) there was an obvious next step: We needed to remove our reliance on product providers for technical knowledge. The only way this can be achieved is by having the required technical knowledge “in house”. The only way to prove that you have the knowledge is to sit (and pass!) technical exams. That’s exactly what we did. We now have one financial planner fully qualified to the new level (designated by Dip PFS) and another on his way and a paraplanner and trainee paraplanner with one exam sitting to go to achieve Dip PFS status as well (assuming passes of course). So with the RDR band wagon rolling slowly forward It gives me great pleasure to announce that it will not affect us. We do not have to change our business model, “sell” a new way of working to our clients or live in fear of not getting the qualifications. We’re already there and ready for business. If you would like to find out more about what we do and how we do it give us a ring on 0845 345 3536. Huw Jones is senior financial planner with Proposito Financial Planning, an independent firm of financial planners based in Wiltshire.