So the RDR finally started on 1 January. Although the New Year feels like a distant memory, we are still at an early stage in terms of understanding the full impact the new regulation will have.
Even allowing for the fact that many of the advisers I have spoken to come from very different starting points – those who have just got their qualifications in time vs those that have long been chartered; those that are still tinkering with their charging structures to those that have been fee based for a number of years – there seem to be some common themes emerging even at this nascent stage.
Firstly, there is a degree of relief that the preparations are over and it has finally started. That is not to say everyone I speak to is a supporter, it is just people seem to be more comfortable doing rather than thinking about it.
I hear that existing clients are, on the whole, accepting of new arrangements, although the impact on new business remains uncertain. We will get a better picture of that as the year progresses.
However, there is a lot of disquiet about compliance, and for a number of reasons.
Many are concerned about ensuring they are on the right side of the new rules, meaning it takes longer to deal with clients. This might be expected to lessen with time, but more worrying are concerns about the reporting requirements for the Retail Mediation Activities Return.
A number of problems have emerged, not least conflicting explanations (in form and guidance) on requirements to ask for information that seems to have no bearing on the advice process.
Apfa has raised these concerns with the FSA, which has committed to look into clarifying what is required.
Another common cause of complaint is how to deal with VAT.
HMRC guidance has been less clear than it might be, and its changing views have not helped. Apfa members can get assistance through our helpline, developed with KPMG and available through our website.
We will be looking to use the intelligence this generates to provide further guidance on the most common emerging problems.
A final theme is a mixed picture of provider readiness which continues to cause frustration.
The FSA confirmed that it would take a tolerant stance on most issues in the first six months of the year, with the exception being for those without the appropriate level four qualification and for the payment of anything that looks like commission. So there is limited opportunity to firm up on any outstanding issues.
It is still early days. Apfa will be pursuing issues and problems with the FSA as they arise. We will shortly publish our benchmark for the advice sector at the end of 2012. This will help us monitor change going forward and provide a robust evidence base of what is happening, ensuring a level of accountability.
We remain keen to hear from advisers about the problems they encounter so we can look to put things right.
Chris Hannant is policy director at Apfa