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| The
first choice for people
in pensions |
| RDR
consultation paper: call to action
By Rosie Horsley |
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The Financial Services Authority (FSA) has thrown down the gauntlet to the financial advisory community, saying it needs to start thinking how it will implement ‘far-reaching’ changes by 2012 – as set out in its consultation paper on the Retail Distribution Review (RDR). The changes, which aim to improve the quality of advice savers receive, focus on ensuring that advice is truly independent, reflects investors’ needs and is easy to understand. Other modifications proposed by the FSA aim to eliminate commission-bias within the system by ensuring recommendations made by advisers are free from the influence of product providers. John Pain, FSA managing director of retail markets, commented: “The RDR is about regaining consumer trust and confidence in the retail investment market, building a more sustainable sector and making it easier for people to find their way around and get the help they need- this is more important now than ever before. “We have today set out the specific changes we propose to make to implement our far-reaching package of measures. This is a call to action for the industry- all investment advisers need to consider how they will respond and implement these wide-ranging and challenging improvements by the 2012 deadline.” The FSA welcomes responses until 30 October 2009. The industry, however, has not waited long to comment, with the majority of commentators welcoming the consultation paper. Steve Folkard, head of pensions and savings policy at AXA Life, said: “We welcome the transparency this will bring savers and investors and the focus on product design to add value where it is of most benefit to the customer. “On simplified advice we believe that clear guidance from the FSA will be an essential component needed to give providers confidence to develop services in this area.” He added that AXA Life would outline thoughts on this in its response to the consultation in October. Towry Law said
the FSA has demonstrated its commitment to consumers through the
consultation, with Andrew Fisher, chief executive at the law firm,
commenting: “We are delighted that the FSA remains committed
to implementing rules to improve the consumer experience and raise
professional standards within the financial advice industry. They
have quite rightly ignored calls from some IFAs for the RDR proposals
to be delayed or watered down.”
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