Ernst & Young has warned providers are adopting “highly risky” RDR implementation strategies without appropriate back-up plans in the event the deadline is missed.
In its One Step Beyond report, which looks at the future of long-term savings and investments, E&Y says it has seen examples of where providers are not doing enough to track their progress to RDR readiness.
These include providers working to a deadline of 31 December for key implementation tasks, with no milestones set to measure progress ahead of that date. E&Y has also seen providers failing to keep risk logs of what could go wrong, and lack contingency plans if regulatory requirements are not met on time, such as where companies are relying on third party software providers.
It has also noted providers are not keeping records of why strategic decisions have been taken, such as reasons behind a provider’s approach to facilitating adviser charges.
The report says: “In our view, leaving critical implementation tasks to the ultimate deadline is highly risky, and insurers should be planning for an earlier RDR readiness date, with explicit contingency plans in the event of slippage.”
Clearwater Financial Planning managing director Duncan Carter says: “If providers are outsourcing RDR implementation and they have not got a plan B, that is risky. Given that we have been given a cliff edge date of 31 December, I do not understand why in every department things are being left so late.”
Aegon head of regulatory strategy Steven Cameron says: “Providers are only ready if they align with both adviser and customer needs. Facilitating adviser and consultancy charging is the biggest and most complex part of this. We are very much ready to go and we will be making detailed announcements of our RDR plans shortly.”