Retail Distribution Review (RDR)
The FSA have announced and reiterated that they will continue to deliver the programme that was set out in their Business Plan in February. This includes the Retail Distribution Review and so for the foreseeable at least, it is very much "business as usual".
Taking effect from the end of 2012, just as the new regulator is scheduled to take over the reins, the RDR proposals on the distribution of retail investments will impact on all regulated firms involved in producing or distributing retail investment products and services, including banks, building societies, insurers, wealth managers and financial advisers.
So why have the FSA been doing this work?
In June 2006 the FSA launched the Retail Distribution Review (RDR) to address perceived problems in the retail investment market. In particular, the FSA sought to restore consumer trust and confidence in retail investment products and services by, among other things, improving standards of professionalism and ensuring that firms deliver "fair outcomes" for consumers.
The FSA's aim with RDR is to modernise the industry and give consumers more confidence and trust in the market at a time when they need more help and advice with their savings, investments and retirement planning. The FSA hope to achieve three outcomes which they believe will materially alter and improve the interactions between consumers and the industry:
- improve clarity for customers on the types of services being offered and the differences between them;
- raise professional standards; and
- reduce conflicts of interests which result from remuneration practices and improve the transparency of the cost of all advisory services.
Bovill are running briefings on the proposed changes, and we can work with firms to assess the impact of this significant regulatory change to ensure that this new era of regulation is met with appropriate compliance arrangements and controls. Indeed, we are in discussion with our existing client base about what the proposals may mean, and ensuring firms are as fully prepared as they can be.