20th June 2013

Aegon: What has RDR ever done for us?

RDR is here, and as we adapt to it I’m reminded of a Monty Python sketch. No, not the Spanish Inquisition or even the Dead Parrot, but one of the best from the Life of Brian 'what have the Romans ever done for us?'

So to paraphrase what has RDR ever done for us?

While RDR has never given us an aqueduct or roads, RDR has begun to deliver a number of benefits for businesses.

Clarity of vision

Providing financial advice is both a business and a profession, and every successful business must have a vision or it will drift, perhaps never fulfilling its potential. It’s a plain business fact that every successful business needs to know where it’s going and why it’s in business. As the business guru, Joel Baker once said:

‘Vision without action is a dream. Action without vision is simply passing the time. Action with vision is making a positive difference.’

Remember, when you create a business vision you’re inviting others to help you see the possibilities you might not see. You’re creating the future of your business. Many businesses are now standing back and have a clarity of thought around the future direction of their business.

Focusing on the right clients

The time invested in understanding and segmenting your client bank is some of the most valuable and profitable time any business can invest. If it’s done properly, customer segmentation can help a business to:

• understand the clients that it has
• identify unprofitable clients
• concentrate planning on profitable clients
• target those suitable for the solutions available
• develop a proposition based on the needs of their clients
• create a vision based on fact, not gut feeling

Again, more and more firms have done this and are starting to see the benefits.

Propositions that add value

For too many years, because of the crutch of commission, advisers have kept quiet about all the work they’ve done for clients and a perception evolved that advisers do what they do for nothing. Many advisory businesses are now fighting back against this perception. It must be changed. As a profession we must now start talking about the experience, empathy, expertise and solutions we can provide. Clients must be aware that these are valuable commodities that have a deserved cost attached to them. The value advisory businesses add must be sold and more and more are using innovative and impactful ways in which to do this.

A focus on profitability

Henry Ford once said:

'A business that is dedicated to customer service will have only one problem when it comes to profits… they will be embarrassingly large'.

Our profession is about service. The secret is to make sure that each business has the processes and technology in place to deliver this service at a profit. The rise of platforms has enabled many business models to deliver an attractive client proposition while making sure business processes are streamlined and effective, saving time and money, while maximising the client experience. Again, RDR has been a catalyst for platform adoption.

Yes RDR is not perfect, and we may see changes over the next few months. But apart from vision, segmentation, clear propositions and a focus on profit, have you ever thought what has RDR ever done for us? 

John Joe McGinley

Head of Business Brain, Aegon

June 2013

RDR