Retail is detail – but not in financial services
I had the pleasure of chairing a roundtable meeting recently which brought together various financial journalists with experts from NFU Mutual, the well-known provider of pensions, investments and insurance.
The discussion centred around the Retail Distribution Review, that seismic regulatory initiative which became part of the UK’s financial planning landscape at the beginning of 2013. The RDR took several years to arrive and, according to financial services practitioners, its impact has been immense: on a par with the City of London’s deregulatory Big Bang back in 1986.
Commission payments to financial advisers have been banished by the new regime. What’s more, the RDR’s also been responsible for imposing minimum levels of professional qualification across the financial services market place.
There’s no doubt that the RDR has forced many providers and financial advisers to re-calibrate their business models now they’re obliged to operate in a commission-free world.
As for consumers, NFU Mutual produced some telling research to accompany the roundtable event. It turns out that, post-RDR, one-in-six consumer now choose to surf the web for answers to their money queries, a figure which has jumped 55pc since the new landscape came into being.
During the course of the discussion, journalists and experts alike agreed that the term ‘Retail Distribution Review’ was a fairly unhelpful monicker for such an important change to the rules governing financial advice. In terms, at least, of conveying the message to consumers.
I’m inclined to agree and wonder whether the use of such an oblique description explains why providers, subsequently, have generally avoided referring to the RDR in their communications with the general public. In recent months, I can’t think of a single retail advert, promotional campaign or communications initiative where a financial services company either refers to the RDR, or trumpets its status as an organisation that’s fit for purpose under the auspices of the new regime. Do get in touch if you know otherwise.
This compares starkly with the run-up to the RDR where, in the financial B2B press at least, providers were keen to puff their impending post-regulatory propositions to advisers.
Swerving any references to the RDR from a retail communications perspective is a puzzling tack to take I think. Over time, I’d hope the industry did more to address this.
Contrast such actions with, say, a sector such as car manufacturing. Members of the public may not be interested in the finer points behind a EURO NCAP safety test. But car makers which perform well in this area are only too keen to trumpet their achievements in adverts to would-be buyers of new models.
If the RDR is such a force for consumer good, why don’t those financial services providers which are in healthy shape as part of the new regime advertise their strengths on the back of this to the wider world?
Organisations have already spent millions of pounds getting their corporate ducks in a row to operate successfully in the post-RDR world. Effective communication to the public about their achievements would equate to inserting the last piece in a fiendishly complicated jigsaw puzzle and possibly benefiting commercially as a result.
Perhaps providers are wary of investing (wasting?) even more money informing the public about a subject which, let’s face it, the average person continues to know very little about. However, the fact is the RDR is not going to disappear any time soon. If there’s an onus here, it’s surely on the industry to reach out to the public. Either collectively, or through a handful of visionary companies looking to gain a first-mover advantage.