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Categories:Other,Regulation

MM Leader: FSA fails to offer guiding RDR transition light

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The FSA last week published its answers to the top questions it says were asked at its recent retail distribution review roadshows.

The answers appear in this week’s Money Marketing and further information can be found on the regulator’s website.

They provide useful guidance on some RDR misconceptions but what is most noticeable about the list is that it does not touch on many of the big business transition concerns and questions advisers need answering in the run-up to January 1, 2013.

The simple reason why these important questions were not included is that the regulatory bodies have yet to figure out the answers.

Advisers, trade bodies and professional bodies have all spoken out about their concerns regarding a lack of clarity over the VAT treatment of advice services. HM Revenue & Customs recently called for help from IFAs in drawing up the guidance but there is no word on when this will appear.

The FSA’s upcoming guidance consultation and subsequent rules on legacy commission may have a massive impact on some firms depending on where the regulator sets the boundaries on what it considers new advice. It is still unclear when firms will get these final rules.

The regulator’s recent platform policy statement failed to give the industry a definitive guide to what charging structures will be allowed. Although the FSA stated its desire to ban both cash rebates to investors and payments between providers and platforms, it will conduct further research before making a final decision.

Considering the way the regulator has flip-flopped through the consultation, there may be a further twist before the final rules are agreed.

With many firms looking at creating a layered advice offering that may well include simplified advice, last week’s confirmation of a delay in publishing guidance until later this year was yet another frustration.

None of this means firms cannot continue on their RDR transition journey and this lack of clarity is not an excuse to stick heads in the sand. The principles and general direction of the RDR are clear.

However, as the FSA continues to cling to this arbitrary deadline, it must appreciate that the huge uncertainty surrounding so many issues is making the journey far more difficult than it need be and that those calling for pragmatism are realists, not ostriches.

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Readers' comments (8)

  • The RDR implementation date must be delayed until all the rules that apply have been agreed and been in place for at least year.

    Financial Services deserves better than this.

    How are we supposed to plan our businesses when the rules appear to change weekly.

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  • In 2006 my optimistic view of the RDR was that at best it would prove a disaster for both the Industry and the consumer when all vested interest is removed. However I have now upgraded this to cataclysmic.

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  • Farcical and inept. What is this costing the consumer? What are they really getting out of it?

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  • I think they are stalling till new body takes over and it will all fall apart. There is no way on GOD'S EARTH this will work. Total wast of time and money. They are now running about like headless chickens with no-where to hide.

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  • Bill,

    What the consumer gets out of this are high fees, inflated by regulatory costs, that a lot of of them cannot or will not pay.

    If you take away the lies ,deceit & spin, the RDR is all about helping certain leeches slither up the greasy pole of advancement.

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  • If you have a leader who is unaccountable you get Muammar Muhammad al-Gaddafi. If you have a regulator who is unaccountable you get the FSA. It’s a shame this unelected unaccountable dictator can’t be swept aside in a Financial Spring where this abomination can be seen for what it is.

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  • This is like the FA telling all football clubs that there is going to be a complete change to the rules of football but not telling them what they are and when you ask the ref what they are he doesn`t know either, the only thing he knows is the date they will be implimented on, you couldn`t make it up! What a way to regulate an industry!

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  • The Industry is in uproar and who can wo go to -- certainly not the unaccountable egulator as they pursue the relentless push towards RDR without it seems knowing the full implications.
    The FSA will say it has produced many consulation documents on RDR for the industry to comment on -- but if we all are being realistic about it -- only the very few have replied to this process ad certainly mainly the people with vested interest.
    As for the normal IFA (like me for example) or non IFA advisers whom may I say may still be doing a good job for their clients notwithstanding what the Chartered advisers will say --- all of the industry advisers who work in financial services whould be asked by way of a questionairre their opinion on the various issues as they see them.
    What I would like to see happen is that this confidential questionairre be completed and the results published accordingly-- so the views of the many are heard ??
    What can make the FSA listen in my opinion is a voice from the pink press industry across all sectors by the people at the front end not just the individual views of the provider firms or Directors of Networks etc.
    The implimentation of this is smewhat more hard to achieve but certainly not impossible. My thoughts would be that this common questionairre can be formatted via MM or another industry press body willing to take this industry survey on. The Networks can be asked to pass these on to their thousands of advisers or regulated firms working under them to be completed and sent to say an encrypted e mail address to ensure confidentiality -- say MM or similar
    Bank advisers and other sectors could be asked to do similar either through the Bank -- if they permit this -or individually asking those advisers to submit their responses online.
    This quesionairre could also be reworded for the provider firm's or others to complete but in any event we will have a consenous of opinion and not an individual opinion of a firm or adviser as they have a mutual interest in their own view -- that I can see constantly.
    Nobody can argue that these changes the the most complex to ever hit this industry and not only affecting advisers or firms but more importantly the general public (who don't even know what is happening)
    If we compare this to say challenging the Government on a legislation issue the only way sometimes that this is done sucessfully is to have many people speaking with the same voice -- petitions or otherwise an if someting is not correct or needs changing -- then this should happen.

    Finally if this suggestion were to happen then we as an industry can lobby the MP's accordingly -- that is if the FSA cannot read the outcomes as published independently from their consulatation papers from the selct few.

    I think everyone can agree that if we have no advisers -- we have no industry -- including the provider firms and the FSA--- and the advisers have a certain increasing mutual interest to provide their views even if they haven't done so before

    Is this a mission impossible -- I don't think so judging on the opinion from IFA's and others I see everyday on the MM site -- but is this an easy ask -- no

    How do you start -- ask your readers to comment about this idea to gauge interest
    then ask the Networks to participate etc -- after all what have they got to lose --- sorry I forgot 'Advisers' we could say -- or eventually their business or the industry the way that this is going
    Or simply dis-regard what I have said as another independent view -- but with no self interest involved this time.

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