Financial services partner Shaun Crawford says: “The ban on commission and its replacement with adviser charging alone will be hugely expensive and disruptive for the industry.
“And questions remain. For example, what proposals, if any, will the FSA put in place to help adviser firms transition to fee-based models? How will adviser charging work in practice when, these days, most investment propositions are multi-fund based?
“It is our view that the costs to the industry of shifting to an adviser charging model have been grossly underestimated. The FSA has made clear that the transformation involved in RDR implementation will be expensive for distributors and providers alike.
“It estimates that an investment of close to £500m will be shared across the industry by 2012 – staggering. This of course comes on top of a range of other industry initiatives such as preparing for Solvency II and implementing TCF.”