Through a process known as the Retail Distribution Review (RDR), the FSA is modernising the way recommendations about investment products, such as ISAs and pensions, are made to investors.
The changes come into effect on 31 December 2012. In preparation for this date, many firms are already changing the way they operate and are preparing to meet the new standards by, for example advisers taking qualifications.
The changes being made, as a result of the RDR, aim to ensure that:
• advisers tell you how much their services cost and agree with you how much you will pay.
• Advisers who offer independent advice must consider all relevant options and do so free from any restrictions (such as working with only a select group of product providers) or bias (such as being paid by commission). This makes sure that the advice offered is truly independent and, if it is not, the adviser must clearly explain why not.
This results in advice that is received from competent, trained professionals who subscribe to a code of ethics ensuring they act with integrity and treat their customers fairly.
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