You probably already have a long list of changes that must be made to your business to make sure you will be RDR-compliant. One which may have been overlooked is collection of the additional data that will be needed to complete the regular RMAR return post-1 January 2013. Being prepared for these changes now will save the pain of having to go back through previous records to strip out the relevant information when it is time to complete your first return of 2013.
Existing RMAR sections A – J remain virtually unchanged with just a few tweaks, mainly in section G to reflect the introduction of restricted advice. The addition of section K – adviser charging – and Section L – consultancy charging – are the areas where a significant amount of additional data will be required.
Looking at Section K, firms will need to distinguish between initial and ongoing revenue. This will then need to be split into payment for independent or restricted advice. The next step will be to break these two amounts down further to that invoiced directly to clients, via product providers or via platform services. Firms operating a model that includes both independent and restricted will already have 21 additional data fields to complete.
You will then need to look at initial charges in more detail. Is the initial revenue generated by lump-sum payments or regular instalments? In turn, these numbers will need to be broken down between the method of advice (independent or restricted) and invoicing (client, via provider or via platform). You also need to record the number of one-off advice services provided. This makes another 24 data fields, so we are up to 45.
Now consider how many clients are paying for ongoing services, how many were paying at the end of the period, how many started paying and how many stopped – another four fields.
The final part of section K considers the types of adviser charging structures that you offer to your clients. This is where you record the minimum and maximum hourly rates, fixed fees, percentage of investments or combined charging structures, divided into independent and restricted advice for both initial and ongoing services. And then all typical charging structures must be identified.
So now section K is complete and potentially we have a total of 89 data fields that need to be filled in before we even start on section L! Those of you who advise on group personal and stakeholder pension schemes need to complete this last section which has a further 31 data fields before you can finally submit your RMAR to the regulator.
I think you can now see why it is so important to have a system in place ready to record this data from 1 January 2013.
Linda Smith is senior technical analyst at Aifa