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CII and ABI reject call for RDR delay

The Chartered Insurance Institute and the Association of British Insurers have argued against the Treasury select committee’s recommendation to delay the RDR by a year, saying such a delay would increase uncertainty and damage momentum.

The TSC published its report into the RDR over the weekend, which called for the implementation of the RDR to be delayed by a year to give advisers extra time to attain the required QCF level 4 qualification.

But the FSA says it remains committed to the existing timetable of January 1, 2013.

CII director of policy and public affairs David Thomson says: “For the advisory community, further delay will serve to increase uncertainty and even undermine the positive momentum that has already built behind the RDR.

“We believe the public is hungry for a financial advice sector that has earned parity of esteem with other professions.”

Thomson cites CII research carried out in June which suggests that 33 per cent of those who do not currently take financial advice would consider doing so once the RDR changes were explained to them.

The ABI also supports the existing timetable for implementing the RDR.

ABI director of life and savings Maggie Craig (pictured) says: “The ABI does not feel a compelling case has been made for a delay on adviser charging.  We hope that the financial adviser community should not need a delay in order to obtain the relevant qualifications. 

“We must all now focus on consumers receiving good quality, affordable advice so the RDR is successful.”


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There are 36 comments at the moment, we would love to hear your opinion too.

  1. “We believe the public is hungry for a financial advice sector that has earned parity of esteem with other professions””
    “Thomson cites CII research carried out in June which suggests that 33 per cent of those who do not currently take financial advice would consider doing so once the RDR changes were explained to them”.

  2. off course the ABI want it to go ahead its a great cost saving for them, they havn’t thought about the drop in business!
    As for the CII – talking rubbish as usual, they really have no idea – or is it they just don’t care!

  3. philip melville 18th July 2011 at 12:26 pm

    I think they mean that any delay will impact on their sales figures . Anything else is utterly irrelevant.

  4. Why should it be delayed? We have known this has been coming for years. If you are not ready it is your own fault. Bring on RDR as it suits all well run IFA businesses with a correctly established fund based income model. There will be some fantastic opportunities and clients will benefit as we get away from shoddy commissions and under qualified advisers.


    ABI is a safe house for sub standard providers no longer supported by independent advisers with choice. They see RDR as an opportunity to force the sale of their SUB STANDARD products via tied and restricted advice and hide behind the ABI.

    The CII is an exam machine with its own professional status as its agenda.

  6. The CII, PFS and CISI, have all said they are not involved in the RDR debate, only to providing the neccesary qualifications. Well here we go again Self Interest, conflict of Interest, they have a financial Interest.
    The ABI also has a Financial interest in all the renewal commisions and trial fees that they recieve from orphan clients, as IFA’s leave the proffesion to the regulators and banks to destroy.

  7. Did you expect anything else from the CII and AbI.

  8. Hector Sants says “There is reasonably good evidence of the willingness of potential investors to pay fees, but that does correlate with the available amount of money for the investment and clearly at the lower end […] there is a risk that they would not want to pay”

    Enough said. Give clients a continued choice.

  9. Or put another way perhaps the response from said Institutes/Associations : Please do not delay things as it will severely upset our cash flow forecasts. As for this magincal day when all ills will be removed, one would have to question the sanity of any client doing business now when in only 18 months all the bad boys will have gone away – why take the risk? What do these Institutes and Associations actually bring to the IFA’s table??? Twenty plus years in the business and I am still wondering !!

  10. “33 per cent of those who do not currently take financial advice would consider doing so once the RDR changes were explained to them”.
    Well, approx. 90% of those who currently take INDEPENDENT advice will not do so, once the RDR changes have been explained to them.
    But this is the plan isn’t it?.
    Whats the matter CII, will your bonuses be messed up if the exams are spread over a much needed extra year?
    I thought that the TSC was part of the government and therefore, as elected people, were the ones who made the decisions.
    Silly me. It appears that the facist FSA and their hangers on, still rule the roost.

  11. It is all very well for David to talk about 33% willing to take advice if RDR was explained to them but frankly as no-one is explaining this to the public then this is a nonsense unless the CII is going to start to do so but apart from that what was the result on the other 67%?

  12. Another pissed off IFA 18th July 2011 at 12:54 pm

    We should cast our collective minds back to the beginning of the single European currency.

    Q. What was promised?

    A. The solution to all our economic ills ‘at a stroke’. Darlings of the Left such as R Branson Esq. thought we should ‘take a chance on it’. The beginning of a halcyon period of economic cooperation and development.

    Q. What actually happened?

    A. The economic meltdown of Ireland, Portugal, Italy, Greece.

    Well done, boys. Now please line up in an orderly fashion for your pensions and knighthoods as there is likely to be rush before this lot hits the fan.

  13. ” positive momentum” what positive momentum? This is Turkeys voting for Christmas stuff, can`t they see?

  14. Getting the exams by the Dec 2012 is not such a big deal, its having everything else in place to be RDR ready that is the biggest killer.

    Its all Too much to deal with and try to run a business at the same time.

    The Treasury are ABOVE the FSA and should therefore lay down what they would like to see happen. This is an FSA project and want it in place before they are dissolved

  15. Policing is only easy in a police state and dictators can only thrive in a dictatorship. Here we see and breath a breath of fresh and free air – and what would the ABI and CII know of such things?
    The ABI, CII and PFS are regulatory lackeys. Part of this problem has been caused by their misrepresentation and in the case of AIFA no representation! Democracy hurts dictators and here we see them starting to squeal. Let’s just see how they continue to squirm in the face of elected MPs talking common sense and with balanced and fair proposals.

  16. Graham Lawford 18th July 2011 at 1:24 pm

    Sounds like Beeching and Railways all over!
    RDR removes tracks for available vehicles so majority of clients cant afford to get where they want to be but leaves main lines so that the ‘few’ who can afford to go out of their way can still arrive at their destination!
    In a few years time ‘they’ll’ (govt) be looking for new ways to reintroduce another affordable system that the majority can afford.
    But but but not until the unbroken system we have now is dismantled with no hope of return!
    Dont they ever learn??????

  17. I have been Diploma qualified for 16 years but it has never made any difference to the way potential clients have viewed me. I also have 2 degrees, but I have still had to compete against tied advisers, bank staff and lesser-qualified IFAs for business. Joe Public has never had any idea about the qualifications needed to be an IFA so was never in a position to differentiate between those that had put the extra effort in to achieve greater technical competence and those that hadn’t. Indeed, vast numbers of our potential customer base have yet to understand the difference between independent advice and tied advice.

    So David Thomson is talking rot when he makes an assertion that the “public is hungry…….”

    There seems to be a whole army of people looking in on us advisers whose job it is to meet with the public and give financial advice (regulators, educationalists, trade bodies, politicians) who all think they know what the public want. The fact is, their ill-constructed surveys with their own agendas are misleading in the extreme.

    I agree totally with every adviser being properly qualified but the rest of RDR will almost certainly result in less saving, less retirement planning, less protection being sold and more mis-buying and higher costs for those who do take advice.

  18. Perhaps the MPs have seen through all of the subterfuge from the banks and realise that RDR is driven by the banks. The banks will not pay their staff commissions but will pay a bonus. Please explain to me the difference between commission and bonus, I believe both are based on how big the sale is !!

  19. Of course the CII and ABI do not want to see a delay in RDR as they are both making huge profits from this event.

    Unlike the larger organisations, small ones like my own are struggling to run a busy practice whilst also studying for exams and find it annoying that my 17 years of experience within Financial Services are not taken into consideration even though we have regular CPD time and regular exams within the network that I work. After all the Diploma within 10 years will be out of date with the changes in legislation and no doubt the CII will be pushing for a further exam that we need to all pass.

    Smacks of feathering ones own nest!!

  20. Re Anon @1.24
    You are absolutely correct.The railway line to the east of my home was ripped up after the Beeching report, resulting in a devastating economic situation for the surrounding area.
    40 years later-it is about to be replaced!

  21. CII, what a bunch of wasters.
    Moneygrabbing duplicitous wasters.

  22. RE: Bill Wells

    Excellent post and one I completely agree with but also one that I sincerely hope that anonymous @ 12.27pm reads and takes on board!!

    Rather than coming on with their sanctimoniuos higher than thou attitude he/she should take time out to realise that RDR is a threat as it will shift the balance of power towards bancassurance at the expense of the independent sector. If he doubts this why are the likes of Lloyds/Scot Widows looking to increase profitability via bancassurance after RDR?? This increased profit will be at the expense of the consumer.

    I am sure there are opportunities for well structured IFA’s to benefit post RDR but this will be at the expense of fellow IFA’s and will offer little significant benefit for consumers as their choice (re remuneration options) will be severley limited.

    Like you Bill I am diploma qualified with a degree behind me and like anonymous I feel our business model will survive post RDR so have little to fear (i hope) but the fact remains RDR will not meet its stated objectives, will not benefit the end consumer (apart from HNW clients maybe) and will be an unmitigated disaster.

    I hope anonymous can open their eyes and see this!

  23. Is there any thing good on the telly tonight!!

  24. I don’t know why they don’t just cancel RDR altogether as MAS will save the world!

    Didn’t you know that the world and his Dog can now receive wonderful free and total unbiased advice from the Money Advice Service.

    The fact that it’s generic and means F**k all when you realise that it’s actually inappropriate to your needs and you won’t be able to sue the a**e off anyone is irrelevant because it was Hector’s scheme.

  25. Graham Pattinson 18th July 2011 at 4:03 pm

    I disagree with Mr Thompson the CII director of policy and public affairs. Common sense suggests to me that100% of those who do not currently take financial advice will not take financial advice once RDR is explained to them. The public is not hungry for financial advice and in truth never has been. The public currently have a choice, fees or commission, clearly stated on the T.O.B. Why force them down a fees route?

  26. “A survey by Defaqto revealed almost two-thirds of consumers are comfortable with researching and buying financial products online without professional advice.

    The financial research firm found that 61% of people on average across all product areas are happy to buy products online.”

    Take Note CII, ABI et all. The way things are going you won’t have any members to force your views on soon.

  27. Maybe it’s time to look at the roll of the FSA, it’s time Network’s stood up and said enough is enough to all this drivel

  28. The Select Committee, having taken a vast amount of evidence and interviewed many of the leading figures in the industry, recommends a year’s moratorium.
    Who the hell are the CII and the ABI to argue?

  29. If people are so willing to pay for advice once it is all explained to them, then why offer the money advice service.

    After all just explain that you are going to charge them cost plus some profit and they will write out the cheque.

    What the FSA says and what the FSA does are two different things and for some reason Parliament are just too weak to do anything.

    I have the greatest respect for Andrew Tyrie but surely he can see he is pushing at a closed door.

  30. CII research carried out in June suggests that 33 per cent of those who do not currently take financial advice would consider doing so once the RDR changes were explained to them.

    Previous surveys carried out also revealed they would be prepared to paya whopping £25 per hour for said advice.

    Maybe in these surveys in the intersts of TCF and transparency the public should be given realistic facts about likely costs for advice, then the results of the surveys might be more accurate, and not tailor made to suit the FSA, CII, etc, etc!

  31. £25.00 will not cover the suitability report and the compliance costs which surround it, never mind the fact that the regulator is calling for a huge 35-50% salary hike.

  32. I think my comment posted elsewhere as below might be valid here too.

    As one of those quoted in the report, the fact that the evidence put forward at great expense by the FSA to justify qualifications was to quote the TSC ‘weak’ actually underscores the fact that one of the original reasons for the RDR as quoted by McCarthy at Gleneagles ‘ the distribution model is broken’ is shown up by all this for the lie it actually is !!! Forget the 1 year delay there is no justification for it in the first place !!!

    I actually believe that the qualifications requirement is actually illegal and should have been tested in a Court – perhaps it will be ??

    As far as the same old arguments about fee charging professionals being best – that simply doesnt hold water in reality – if it did the mass market would have already migrated to them – they have not what does that tell you ??? In a free market THE market decides NOT the FSA or a naive fee charging weath manager who perhaps has a vested interest – To the likes of them – just get on with it and leave the rest alone – you have nothing to fear from us old dinosaurs do you – remember the market ALWAYS decides who suceeds and who fails thats the way a market works !!!

    As a senior member of the Adviser Alliance, I am also pleased to see the amount of submission taken on board by the TSC – unlike AIFA – that too speaks volumes !!!

  33. No doubt we will see the top boys at the MET working for the FSA by the end of the year.

  34. The FSA is so drunk with power, then it feels no shame in totally ignoring the views of elected MP’s.

    Where is AIFA when you need them?

    No where as usual!

  35. The CII and the ABI have been supportive of RDR since day one. In fact, if you look at the original RDR proposals you will find a striking similarity to the ABI’s submission. So similar, in fact, that accusations of plagiarism would have echoed in any other industry.

    The CII has profited wonderfully from the RDR threat and will continue to push for ever higher standards because this means ever higher income streams.

    Remove the vested interests and the RDR stands exposed for the sham it is.

  36. ProRDR, FSA and banking club 20th July 2011 at 3:56 pm

    Of course RDR is for the banks. Just look at Mac Hobans RDR implementation committee. Big Mac Hoban takes advice from a string of bankers, advisers to bankers and former FSA officials. His nine strong team includes:

    Michael Foot, former FSA managing director;

    Carol Sergeant, chief risk director at Lloyds Banking Group; and

    Nick Prettejohn, former Prudential UK chief executive.

    Davide Taliente, partner at Oliver Wyman,

    Simon McGuire, former vice chairman of UBS’s investment banking division,

    Jonathan Herbert, former head of European law at the FSA

    Amanda Harvie former chief executive of Scottish Financial Enterprise,

    Teresa Perchard, director of public policy for Citizens Advice; and

    John Tattersall former chairman of financial services regulatory practice at PwC.

    NB: Foot, Sergeant and Herbert are all ex FSA, Tattershall is the former boss at PWC when Hoban and Chris Cummings were both there, Sergent, Taliente and McGuire either bankers or advise bankers.

    Financial News (24 May) quoted Davide Taliente in an article arguing that rebuilding public faith in the banking sector was something regulators and the banks had to achieve together.

    Taliente says:

    “Clearly, the regulators can do a fair amount to help this and put focus on it. This is something the industry, culturally and as part of its business conduct generally, really needs to take on board.”

    This is a small club and guess who’s not in it – the IFA! The sum total of this groups reads to me like a pro RDR, FSA and banking club.

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