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Retail Distribution Review lessons from the UK give SA financial advisers a distinct advantage

07 December 2021 Bravura Solutions Limited
Carolyn Erasmus, Bravura Country Head for South Africa

Carolyn Erasmus, Bravura Country Head for South Africa

Fintech solutions provider Bravura Solutions, in collaboration with NextWealth and The Collaborative Exchange, has released a white paper that will help usher financial advisers into a post-Retail Distribution Review (RDR) future by analysing the lessons learned from RDR implementation in the UK and how this translates to the South African market.

The incoming RDR proposes significant regulatory reform in South Africa, much like it did in the UK. While RDR aims to ensure the delivery of fairer customer outcomes, it will have wide-reaching consequences for financial advice businesses in South Africa.

Entitled ‘Supporting South Africa’s journey to a client-focused and transparent financial advice market,’ Carolyn Erasmus, Bravura country head for South Africa says, “This white paper serves to pre-arm South African financial advisers with the key points to succeed in what will be a new era for our industry due to the introduction of the RDR regulations.”

“There is no doubt that the financial services market is unique and fired up by passion, new challenges and immense opportunities. The changes that are being brought about by the RDR regulations, however, are not all that new – certainly not for a global company like ours with a significant footprint in the UK,” says Erasmus.

RDR has been active in the UK since 2012 and although its objectives for improved client outcomes were clear, Erasmus believes there are unintended consequences and lessons that South Africa can learn to gain the second-mover advantage.

The paper highlights five key changes in the UK market that can be traced back to RDR. These changes include:

1. The growth of centralised investment propositions – In preparation for RDR in the UK, many advice firms began to change their business models to offer a Centralised Investment Proposition (CIP) or standardised approach to providing investment advice. In 2020, at least 80% of advice firms in the UK work to a CIP.

2. The increased cost of compliance – The cost of compliance has risen significantly since the introduction of RDR in the UK and continues to rise. Businesses are having to allocate time and resources to comply with regulatory change and this impacts the cost of advice.

3. A shift from advice to planning propositions – The UK market has seen a shift from traditional product-based advice, from advisers focused on selling products, to many offering a more holistic financial planning service and defining themselves as financial planners.

4. Growth of financial planning technology – The pressure to improve efficiency and productivity to protect profit margins, coupled with an expanding range of services and tools to meet the demands of modern financial planning clients has led to a growth in uptake of financial planning technology by advice businesses in the UK.

5. Consolidation and vertical integration – RDR prompted a trend towards consolidation of advice businesses and, more recently, larger providers buying or launching advice departments.

As a global technology partner to financial services providers, Erasmus says Bravura Solutions has supported UK businesses in preparing for and adapting to the RDR rules. This latest white paper shares the company’s experiences and key considerations for the adviser market, following the UK’s example.

Erasmus says the outlook is positive for South African financial advisory firms. “Together with our partners, we have gone to great lengths to outline some points of success for advice firms in South Africa. RDR is an opportunity, and the UK provides a roadmap to success.”

Download the full white paper research: Click here

Quick Polls


There are countless articles written about South Africa’s poor retirement outcomes. Which of the following would you single out as the biggest contributor to local savers not accumulating enough to buy an adequate and sustainable pension?


Lack of personal accountability
Poor participation in formal retirement funds
Reluctance to seek financial advice early on
SA’s high unemployment rate
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