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14 December 2011

FTAdviser: RDR countdown


There is no doubt that the Retail Distribution Review has divided opinion. Despite it only being a year away, there are many in the industry who are still hoping that it will be amended, delayed or scrapped altogether.

A recent poll by Opinium showed that 80 per cent of advisers were well on their way to having an adviser charging model, while there has also been a 20 per cent increase in the number of advisers who think that they will be Level 4 qualified come the deadline when compared to a year ago.

Estimates of how many people will leave the industry vary according to who is peddling them and which set of advisers they ask. Undoubtedly some will leave, the industry will contract and some clients will find themselves without advice. But many argue that that is a fair price to pay for gaining professionalism and a higher standing for the industry.

The FSA has not paved a smooth path for RDR, leaving key policy decisions until the last minute, failing to create certainty around some areas of the industry and being slow to respond on others. This prolonged approach, riddled with changes, has left many questioning whether the original aims of the RDR are likely to be realised or if they have become so distorted overtime that they were lost long ago.

Regardless of whether advisers are ready or not, it now seems unavoidable that the RDR will hit come 2013. But RDR does not just mean taking exams and scrapping commission. Many have mooted it as the tipping point for myriad issues in the industry, from use of technology and getting business models in order to assessing client banks and profitability of the firm.

One thing’s for sure, RDR is coming and the countdown has begun.

Full article



© Financial Times


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