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FCA: We are looking at whether RDR achieved its goals


Financial Conduct Authority director of supervision Clive Adamson says the regulator is looking at whether the RDR has been a success so far.

Speaking at the Morningstar Investment Conference in London this morning, Adamson says the FCA is taking interest in how the industry has changed as result of the regulatory reforms.

He said: “Firstly we are concerned – or should I say interested in – whether in all cases the standards of charges and business models we are seeing from advisers are compliant with both the rules and spirit of the RDR.”

Adding that “by and large firms were ready” for the RDR, Adamson also indicated interest in the emergence of new forms of distribution.

Adamson said: “We have started to do some work looking at those areas. Over the coming months we will look more broadly at more sectors of advice markets to see if charging models have achieved what was intended.”

In a speech that looked at the transition of the FSA to the FCA and Prudential Regulation Authority, Adamson said he wants the regulator to work more with the industry, adding: “We don’t want to be seen as the ivory tower in Canary Wharf.”


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There are 27 comments at the moment, we would love to hear your opinion too.

  1. Hampshire Yokel 15th May 2013 at 12:15 pm

    Quite literally…


  2. “We don’t want to be seen as the ivory tower in Canary Wharf.”
    Why not, when that is exactly how you are percieved?
    Cocooned, shielded from the real world, pampered, cosseted, overpaid, surrounded by leather chairs and expensive works of art, embossed writing paper, the list is endless but proves the point.

  3. So let’s spend a £1m or so, which of course we can charge by just adding it to our budget, when to get the answer takes a few phone calls and could cost a fiver.
    The answer should be B……. obvious.
    This tower will not be ivory, it will be gold plated.

  4. FSA/FCA own goal. Ruined financial advice for average man/woman with banks anf building societies and insyurance companies pulling out of market. Will it change no as the people who imposed it are still working under a different name so will not own up to the rubbish the brought in

  5. Yep, we created a bunch of better qualified crooks with even more knowledge with which to ‘dazzle’ customers who now charge even more than before. Oh, and along the way certain organisations made a packet out of selling overpriced qualfications and who are now rubbing their hands in glee at the prospect of RDR 2, while makin a ‘nice little earner’ out of SPS.

    Meanwhile, thousands of people lost their jobs, the public’s access to advice became limited and now anyone with any sense would not even contemplate a career in financial services.

    If RDR was meant to simplify and demysitfy advice for the public, as well as increase competition it was a complete failure. The money would have been better spent on financial education for the public.

  6. Well Clive you wont need to look to far to see there are plenty of own “goals” that have hit the back of the net !!!
    The list of un-intended consequences must stretch from Canary Towers to John O,Groats

  7. They jsut dont get it 15th May 2013 at 12:50 pm

    What they dont realise, because of where they sit and where everyone else sits, is that neither we nor the public want them to be continually and never-endingly “looking into x y and z”.
    If the measures they have introduced were good ones, then it ought to lead to less need for regulation, a reduction in the costs to consumers and should make the whole process of getting and understanding advice easier and cheaper. If it doesnt have that effect then it hasn’t worked.
    They need to get rid of the thousands of incomprehensible and pointless micro-rules and measures and the countless waffling consultation and discussion papers, not to mention the staff employed writing them all.
    Stop forcing clients to receive/read hundreds of pages of documents and allow them and their advisers to have a trusting relationship where the qualified professional adviser takes responsibility and jsut gets on with it, given that they are all of course post RDR in the regulators eyes adequately qualified, provably ethical (SPS?) and non-biased in terms of commission. They were the objectives werent they?

  8. The main thing the FCA is concerned about is their significant drop in their funding due to the significant loss of advisers that fund the retail DISTRUCTION review, FCA

  9. RegulatorSaurusRex 15th May 2013 at 1:19 pm

    Yes of course we will find that the goals of the RDR have been met in full within a very short period.

  10. Was one of the stated aims price out 95% of the population from getting regulated advice?

    Was it a stated aim that regulated advice should only be available to the wealthy?

    Was it a stated aim to Nationalise the advice for the moderate to low earners and for that advice to be non regulated paid for by the taxpayer (MAS)?

    If these were the stated aims at the outset then its been a success.

  11. Exasperated Me 15th May 2013 at 1:49 pm

    What were the goals?

  12. The goals…
    •Consumers offered transparent and fair charging system for advice.
    •Consumers clear about the service they receive.
    •Consumer advice is from highly respected professionals.

    The result? less more expensive advice, fewer products, mass redundancies all round.

  13. Yes I guess the answer to the success or otherwise of the RDR lies in trying to establish what the objectives were.

    But then perhaps it would be an idea to establish whether the objectives were worth achieving or did they have an adverse effect for customers and the industry?

    And should the FCA get to this stage what can they now do to rectify matters?

    Unless the FCA goes down this or a similar path then Mr Adamson’s action plan is just fatuous nonsense

  14. @Jon
    MAS is not paid for by the taxpayer, unless you are speaking of advisers who pay tax.
    It should be, but it is not.
    Maybe it will be when the last adviser is annihilated.
    The aims of the RDR will be conveniently whatever the FCA decide they will be.

  15. Biggus Dickus 15th May 2013 at 4:59 pm

    25 The Colonnade most certainly IS an ivory tower and a stupendously expensive one at that. If Mr Adamson would prefer the FCA not to be seen to be operating from an ivory tower in splendidly luxurious and unaccountable detachment from the realities of commerce, then get the out of it, relocate three quarters of the FCA’s staff to somewhere well outside London and save the industry and its customers a ton of money.

    If the FCA has any real interest in engaging with the industry, then why does it not listen to the cries of IFA’s drowning in red tape and being bled to death by excessive and entirely disproportionate levies, of clients entirely uninterested in wading through great bundles of bumpf for the simplest of transactions and to the increasing clamour for the FCA to obey the law and abide by the Statutory Code of Practice For Regulators?

    The very statement We are looking at whether [the]RDR achieved its goals sums up the attitude of the FCA. All it says is that the FCA is looking into whether or not the industry is doing what the FSA wanted it to do.

    What about whether or not the RDR has or looks like being good for consumers, good for the industry as a whole, good for how well the FCA is going to be able to regulate it, good for enabling the delivery of good value but still profitable quality advice to people right across the socio-economic spectrum? All these vitally important questions have just been completely bypassed. All the FCA seems to be interested in is establishing that the industry is knuckling under to its iron will, not whether that will is actually the right way forward.

    Is it any wonder intermediaries are leaving the industry in droves, that banks are throwing in the towel on providing any sort of financial advice, that people of modest means are being priced out of access to quality advice and losing all confidence in the worth of financial planning?

    But no, the FCA seems as yet not to have realised this. Will it undertake or commission any sort of Benefit:Cost Analysis on the RDR? Will it accept that the increase in the implementation costs of the RDR from £600m to £2.6Bn is an obscenity at hat should never have been allowed and that if we had an Independent Regulatory Oversight Committee, the FSA would have been stopped in its tracks? Will the FCA give us some desperately needed relief from trying to micro-manage every little thing that every IFA does, what he charges for it and by what mechanism?

    Those are the sorts of things that constitute working with the industry, not merely trampling over it in hobnailed boots wielding a big stick with which to bash people senseless if they dare to step out of line.

  16. RDR success would mean moving from A to B. No-knows where A was, or where B is, hence a blank cheque for an unaccountable demonstrably failed regulator.

    Please will someone (where are the trade and professional associations?) make a reasoned case to stop the bus, go back to first principles, and start again,

    There simply has to be a more sensible answer than the one dished up by the FSA/FCA.

  17. @Anonymous
    MAS is funded by two sources; The Department of Business Innovation and Skills which is a Government department (Vince Cable). They get their money from the Treasury (George Osborne) and they get their money from taxes collected by HMRC.
    The other source is from the FSA, not a tax as such but they apply levies to the industry.

  18. Trevor Baines 15th May 2013 at 7:38 pm

    Excessive regulation equates to excessive, time consuming and expensive compliance.

    The original goal of Professor Jim Gower bears repeating. He wanted regulation to ensure that consumers were not made fools of but were allowed to make fools of themselves.

    This regulatory Hydra has spawned an entire industry consisting of people second-guessing what the 10,000 page COBs handbook might mean.

    Common sense has long since disappeared and the ivory tower inhabitants still don’t get it that consumers are not in thrall to charging structures and stochastic planning. They simply want a good deal that is affordable from somebody they trust.

    Would they trust a regulator? My clients, upon hearing of the RDR changes, ask me whether these people inhabit the real world.

    Sadly, I tell them that most have never actually worke din their lives and like career politicans they prey on society by causing monumentally expensive disruption which is explained away as progress.

    Frankly it sickens me.

  19. Over 50% of Bank and 30% of IFA’s now gone will result in a big hole in the FCA funding, I hope the remaining advisers are able to afford their future regulation cost because the FCA has not cut its costs accordingly and unless they make cuts soon I guess the remaining authorised firms will have a proportional increase in their fees!!

  20. Chris peacock 15th May 2013 at 9:04 pm

    If the fca decide the RDR has not produced the desired out comes, will they have the guts to admit it and reverse it.

  21. @BD
    Well said
    I could get my kids to do whatever I said if I wore my hobnailed boots to trample all over them whilst threatening them with a big stick at the same time.
    Then everyone would say, what a lovely family. Such obedient children. Deservedly, I would get zero respect in return.

  22. We are of course been asked to destroy the layer of the eggs via EUro zone who coverts the asset.

    Transaction charges.RDR. commission bans,bits of paper to say you can remember stuff.
    told that our exports are 50% to Eurozone suggesting they would stop buying if not in the club.
    BMW Audi will not sell their cars here? Tosh
    Growth markets lie beyond Europe.

  23. @ jon 6.58
    “The Service is paid for by a statutory levy on the financial services industry, raised through the Financial Conduct Authority” MAS website
    No mention of the department of innovation and skills or the treasury or georgie boy or vincent.
    Levy – tax ? no difference as far as I am concerned.?

  24. man on the moon 16th May 2013 at 10:47 pm

    whats good about the RDR?

    good guys are no longer advisors (not good) sharks got through the shark nets, no-one knows is happening, lots of people have lost their jobs, costs are through the roof, the regulator changed 1 letter in their title, the lawyers are still hunting claims. consumers are being ‘hawked’ QROPS, QNUPS, UCIS, off the wall schemes, foreign property etc by non reg ‘advisers’.

    oddly enough there may be a light at the end of a long tunnel.

  25. Rather than spend more of our money….in barrowloads, considering the success or otherwise of RDR, wouldn’t it have been better to have ONE PERSON at canary towers in the planning stages of RDR and beyond, to distil the comments by working IFAs and others on these postings with FT, Moneymankketing, Citywire etc, and deliver the feedback to the high and mighty in the penthouse suite.
    Mind you, the bigotry by the likes of Sants and Nicholl would probabaly not have been punctured.
    They had their intellectually bankrupt agenda and had stuffed their ears with cotton wool to avoid hearing the truth.
    And to think some div in downing street racked up a knighthood for sants. A parallel universe.

  26. If I’m not mistaken, and to keep it really simple, now that we are well into RDR land, if a client doesn’t want to pay a “fee” for lump sum pension or investment advice, they can elect to have said “fee” paid out of the investment they are just about to place?

    Now, despite being diploma qualified, I don’t have all the answers but, if this “fee” comes out of the investment, is that not very similar to what happened before RDL only it was called commission?

  27. Its is fair to say somethings are good about the RDR especially CAR. This has reduced the influence of the providers in setting the renumeration that advisers receive and made the relationship more client focused. Most advisers I know had gone down this route prior to RDR being proposed so no real change there.

    However the implementation is a dogs breakfast and has confused existng clients and scared the hell out of Mr & Mrs J Public as potential new clients. Beyond that I find little good news in RDR as the advice market is focused on the affluent and those without means have been left to the execution only brokers if any advice at all.

    In that case competition and access to advice has reduced, prices gone up, costs escalating and innovation non existent. How that can ever be seen as a success I fail to understand. In fact the only real beneficiary I can see is the justification for more regulation – which is economics of the madhouse as far as the long term saving market in the UK is concerned.

    However saying all that I am optimistic as a small IFA I will survive and grow. Not because of RDR but more in spite of it. Afterall the more rules on regulation, taxation and legislation – the more people will need a good IFA to help them. Sadly though it gets back to the more affluent getting the right help and the gap between the rich and poor getting wider.

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