04 January 2012

2012 - The final RDR countdown

Much of the debate has focused on advisers reaching the minimum QCF level four qualification requirement but firms which are yet to adopt an adviser-charging model will need to think carefully about their preferred method of charging and perhaps try several different models before deciding which is most suited to a firm and its clients. This will not be something that can be implemented in the dying months of 2012.

Zurich UK Life’s Matthew Connell says: “This year is the moment of truth. The way the FSA structured its response to the TSC was based on 90 per cent of advisers reaching QCF level four. If we see start to see figures that are far short of 90 or even 80 per cent, then the select committee is going to be in a position to call the FSA in for questioning.” But Lanson's public affairs and regulatory consulting director, Richard Hobbs, believes debate on the RDR is “yesterday’s story” and says the RDR will only come under the spotlight again when the time comes for an implementation review.

Along with many others in the industry, Hobbs awaits with interest the outcome of ongoing European negotiations over MiFID II, following concerns last year that a draft of the European Directive suggested restricted advisers may be allowed to receive commission. Connell agrees MiFID II will be a development to watch this year. Although the European Commission has suggested MiFID II is compatible with the RDR, he says given the current state of UK relations with the rest of Europe, the FSA should not be complacent in securing a commission ban for all advisers.

Connell says: “The European Commission is in the middle of all the recent high drama, with vetoes and talk of protocols for UK financial services. The question is whether, as a result of this, the Commission may come under pressure to make life tough for the UK. This issue could become much more politicised than it has been up to now.”

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