MI_22-23_RDR.qxd 22/1/09 15:22 Page 2
22 | Retail Distribution Review
Review the
Review
Joanne Smith, managing director at
The Consulting Consortium, looks at the
implications of the Retail Distribution
Review
T
he end of November 2008 proved different types of advice and establishing a and improving the quality of capital and making
to be a busy time for the Financial Professional Standards Board to boost con- it consistent for all firms.
Services Authority (FSA), the gov-
ernment and journalists across a circle6
sumers' confidence in the industry;
Modernising the way advice is paid for by Clarity
variety of financial services. As we requiring independent advisers to agree the Breaking down the aforementioned elements of
were still trying to digest the impli- cost of financial advice with customers up- the RDR, firstly, the FSA has tried to instil greater
cations of the pre-budget and front, removing the possibility of commis- clarity for consumers through Money Guidance
Crosby Reports, a small matter of the Retail sion-bias and ensuring the cost of all advice is services coming under greater focus. This
Distribution Review (RDR) also came swiftly across increased focus will help ensure that advisers
our bows. circle6
clear to consumers whenever it is given; and
Introducing a new standard for independent fully evaluate the client's ability to repay debt. It
Before looking at the outlined proposals it is advice by ensuring advice is unbiased, unre- will also ensure that advisers undertake an in-
important to point out what the RDR is trying to stricted and extends to all types of invest- depth approach to fulfilling their client's require-
achieve. The review's ultimate goal is to heighten ments. ments.
consumer confidence and trust in the retail In terms of qualifications it is now a require-
investment market at a time when consumers Consumer access ment for all advisers to reach QCA level four
need as much help and advice as possible with To increase and improve consumer access to standard. The raising of these standards will help
their savings and retirement planning. investments, the FSA aims to help firms develop increase skill sets and maintain good levels of
a simplified sales service for a limited range of knowledge for advisers therefore helping to
Main points products therefore building on the work already improve the perception of the market and miti-
Focusing on the actual statement, the main underway in the industry and by individual gate risk in the eye of the consumer. It will also
points highlighted by the FSA as to how this new firms. ensure that there will be no 'grandfathering' as all
level of confidence and trust for consumers can It will also remove its current rules for Basic advisers are now formally required to meet the
b
circle6
e established are by: Advice to further simplify this landscape and it required standards laid out by the RDR.
Providing greater clarity for consumers about will be consulting on policy proposals for the
the advice service being offered by making a RDR during the first half of next year with the Remuneration
distinction between independent advice and intention that all firms will have implemented The final elements of the RDR statement are
sales advice, and including the connection the changes by the end of 2012. potentially the most debated and contentious
with the proposed free Money Guidance serv- Alongside the RDR, the FSA has also been revolving around remuneration and 'independ-
circle6
ice; reviewing the prudential requirements for per- ent' advice. The FSA has outlined a clear frame-
Raising professional standards of all advisers sonal investment firms and will publish a consul- work for the industry to move to a new
by setting minimum qualifications for tation paper on raising the minimum standard remuneration model that will help reduce actual
February 2009 Mortgage Introducer
www.mortgageintroducer.com
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57