This paper from Deloitte explores some of the direct and indirect impacts investment managers will face as a result of the RDR, identifying those groups who are either best placed to take advantage of, or likely to be most challenged by, the changing landscape.
Significant differences of opinion exist among the investment management community about how radical an impact the RDR will have on them. While not having as profound an effect as on advisers and insurers, the reality is that the RDR will shake up the investment market more than many investment managers are expecting. The reality is that the cost of providing retail investment products across the value chain may be squeezed by as much as 50 basis points, as fees become more transparent to end consumers and the media. A reduction in the cost of supply is one of the FSA's desired outcomes, and there is a real risk that much of that reduction will be suffered by investment managers.
Conclusion
To date, the investment management sector has not had the spotlight turned on it from the perspective of the RDR. However, the strategic and operational changes required, whether to capitalise on an opportunity or to neutralise a threat, suggests more significant adjustments than many investment managers have been planning. Each investment manager needs to ensure it rapidly has a clear strategic response to the RDR, a business model that is not only RDR-compliant but positioned in line with market realities, and a plan to deliver in time for the RDR's launch.
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© Deloitte LLP
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