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come into force a year later, on 1 January 2014.


“We are looking to replicate the RDR in the UK,” explains Chris Jordan, Senior Manager in Investment Business at the Jersey Financial Services Commission (JFSC). “However, we have started the process later than the UK and these are very significant changes, so we felt it was important to give industry the opportunity to get prepared properly and get themselves RDR-ready.” Guernsey, on the other hand, is taking a different tack and including RDR features as part of broader-ranging review. A spokesman for the Guernsey Financial Services Commission (GFSC) told businesslife.co: “The Commission has established a working party to consider retail consumer protection, and those issues encompassed by the RDR are under consideration, besides others.” As of yet, there is no timeline available.


All change


When announcing the British deadline for implementation of the RDR rules, Pain described them as “wide-ranging and challenging improvements” and it is easy to see why.


At the receiving end, consumers will have to be clearly told whether the advice they are receiving is ‘restricted’ – meaning it only covers a limited range of products – or ‘independent’. There will be set requirements on exactly how that information is disseminated. The advice process itself within each of these channels will also be streamlined, so consumers may get basic advice (being pointed to websites and leaflets for a DIY solution) or a fuller adviser-guided sales process. Exactly how consumers will be funnelled through each of these paths will apparently be made clear. Crucially for consumers, rules will also change concerning just how advisers can


be remunerated for their services. New Adviser Charging Requirements clearly establish that the customer will pay for receiving the advice and that the adviser will no longer be paid by the product provider for selling the service. In other words, any element of inducement to sell the products of a particular provider has been removed. Significantly, the regulator has included a series of requirements to increase the professionalism of financial advisers. These include a higher minimum qualification standard, a compulsory level of continued professional development (CPD) and new ethics standards. Overseeing all of this will be a professional Standards Board. As Philip Chapman, Associate Director at Complyport, points out: “The main issue for those providing advice to retail clients is that the need to sit an appropriate qualification, which is


December 2010/January 2011 businesslife.co 27





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