As another year starts, we are that bit closer to the implementation of the retail distribution review. At least that is what we are all led to believe.
I am struck by the number of loose ends that still need to be tied up. At Aifa we continue to work hard, pressing for the urgent clarity that is needed on a number of RDR issues. There remains the potential for unintended consequences and we will press to find fair and workable solutions that advisers have sufficient time to imp-lement. A smooth transition will be a key measure of the RDR’s success, not just for the industry but for customers too.
There are issues related to the RDR that are too important to be fudged. They need to be resolved – and resolved quickly. We must have more clarity on how some aspects of post-RDR advice might affect trail commission. We have to know how Mifid will play out – and whether it will work against RDR provisions and whether the UK will be afforded exemptions.
We also have to understand more about the appli- cation of RDR rules to platforms. It is unsurprising that such a respected body as the Treasury select committee has questioned the FSA’s readiness.
The delays on capital adequacy and platforms suggest a dissipation of the impact of the RDR meteor but there is still much damage that can be done by poor implementation.
The development of the new regulatory architecture remains in train and following up on our appearance before the joint committee on the Financial Services Bill, we will continue to press for an approach that is more accountable, responsive and cost-effective.
The role of the regulator must be to ensure markets are effective and efficient. It would be remiss, however, if the new regulator did not also have a duty to take other factors into account, such as improving access to advice and closing the savings gap.
The coming year will see the beginning of other important developments – a consultation on FSA fees, reviews of the funding models of the likes of the Financial Services Compensation Scheme and the Financial Ombudsman Service and the introduction of automatic enrolment into employers’ workplace pension schemes. There will be plenty to keep us busy.
I look forward to the new year with hope and a determination to continue our mission of pressing the Government and the regulator to deliver an improved environment for the provision of that incredibly valuable proposition – professional financial advice.
Stephen Gay is director general of Aifa