Last week’s policy statement from the FSA failed to give platforms, providers or advisers the clarity they were craving as they look to change their business models in the run-up to 2013.
The FSA expressed its “desire” to ban both cash rebates between providers and investors and payments between fund managers and platforms, although it says more consumer research was needed before making a final decision. Considering the way the regulator has already flip-flopped its way through platform discussion and consultation papers, many firms will be loath to bet their futures on this being the final set of rules.
The FSA is also carrying out a guidance consultation on how to clear up the current headaches over defining what sort of business should fall under the FSA’s RDR legacy commission rules.
Given the huge potential impact of the platform fees and legacy commission rules on firms large and small, the FSA’s position that the RDR remuneration changes will still come into force on January 1, 2013 is becoming less and less tenable.
Understandably, much of the focus and energy behind calls for the FSA to be more pragmatic in implementing the RDR has been over the new qualification requirements.
The Treasury select committee has taken a commendable stance in calling for a one-year delay and a softening of the cliff-edge deadline in certain circumstances for experienced advisers.
However, in focusing too much qualifications there is a danger that other, potentially more worrying issues, are overlooked.
This week, Prudential joined Zurich in calling for a delay to the new remuneration requirements due to concerns that providers will not have time to get their systems in place by the current deadlines. Others have privately expressed similar concerns to Money Marketing.
With the continuing lack of clarity over platform fees, legacy commission and VAT, the arguments for the FSA to act are becoming more compelling.
When senior staff at the FSA decided on its January 31, 2013 deadline for introducing the RDR, we are sure they did not envisage a situation where, with less than17 months to go, so much has yet to be set in stone.
In continuing to stick to its arbitrary deadline the FSA risks undermining the admirable RDR goals for the sake of not losing a bit of face – hardly a positive consumer outcome.