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FSA publishes RDR progress guide for advisers

The FSA has produced a guide for advisers to help them track their progress in meeting the RDR requirements in time for the December 31, 2012 deadline.

The guide, ‘RDR – Is your firm on track?’, was published on the FSA’s website last week.

Advisers are encouraged to consider how they are going to meet the RDR professionalism standards including  reaching QCF level four or completing any gap fill.

The FSA recommends that firms build in enough time to pass the relevant qualifications including time for re-sits.

It also suggests firms ensure they have a robust system in place to identify any advisers who continue to give advice when not appropriately qualified.

The guide also refers to choosing to offer an independent or restricted service, and reminds firms “just because a firm is ‘independent’ now does not mean it will meet the new RDR definition of independent.”

On fees and business models, the FSA recommends that firms should build a charging model that supports the advice service but remains fair to clients, and that firms should consider the systems necessary to collect charges, be able to explain new charges to clients and what the charges are paying for.

The regulator recommends advisers seek help from local business groups or accountants and solicitors if they need help developing their fee-based model.

It also suggests firms wanting to offer independent advice should “talk to their professional indemnity insurer at an early stage to ensure cover will be available for all retail investment products.”

The FSA says: “This guide is designed to help you implement the requirements of our RDR in your firm. It asks some key questions that you can use to check progress, identify any gaps, and prioritise and plan your next steps.

“For some of you, implementing the RDR may mean a fundamental change in business model, while for others, the change may be less pronounced. But almost all firms will have at least some adjustments to make to comply with the new RDR rules.

“Whatever your circumstances, this guide should help you in your journey towards full implementation.”


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There are 12 comments at the moment, we would love to hear your opinion too.

  1. “The regulator recommends advisers seek help from local business groups or accountants and solicitors if they need help developing their fee-based model”
    Unlike the FSA, advisers do not have unlimited funds to call in outside agencies to do their work for them.

  2. An interesting document from the FSA. Nice of them to be helpful, even though the layout suggests they think they are dealing with people who are not too bright. Since they expect professionalism in 10 months time it may be an indicator to in-house schizophrenia.
    One question that I did enjoy was “How much will your clients be willing to pay and how much can they afford?” Apart from the standard “if they can’t afford to pay my fees they should look elsewhere”, one could also read the question as “How much can I sting my clients for – its FSA approved”.
    Having worked in an accountancy firm for a number of years the normal position is that clients are “willing” to pay a lot less than they are charged. So the strategy is “How much extra do we put on the invoice, so that when they complain we can provide a discount for that “special” client that brings the figures down to what it would have been in the first place.
    Not treating clients fairly? They are hardly likely to be treated fairly if you go broke chasing unpaid fees.
    This is yet another area in which the cloistered monks of Canary Wharf are out of touch with real life.

  3. I don’t know what all the fuss is about, my clients have all agreed it is in their interests to pay me a fee each month for the next 10 months to cover the cost of my exams, lost income, a locum, FSA fees, FSCS fees and PII costs whilst I take the time off to prepare myself to do exactly what I already do.

  4. They, the FSA, determine we should all be fee based, yet if we want help to develop a structure we have to seek help from Solicitors and Accountants!
    Also a bit late to produce a guide to help us with the changes, been asking for guidance for years and always met with a shrug of the shoulders.

  5. Lovely when people who have no ethos about how to derive an income from direct customer sales/advice (unless you consider that compulsion and thus regulatory fees count in some way!) are so capable of providing guidance as to how a business should run and whom to approach if you need help.

    I had a bank manager like that, thought he had all the answers until they made him redundant. You know what? He’s still out of work!

    You’ve made our bed for us! If it works then well done you. If it doesn’t then you know who to blame.

    I may not appear to be embracing the spirit of RDR, but after all, my views were never really heard and it was a decision by which I am having to abide; but I know right from wrong and sorry, but this is wrong!

  6. If I’d wanted advice as to how to make the changeover from the F rank S pencer A cademy
    I would have asked.

    But to be honest I’d rather put my hand in a baconslicer than take any tips on running a business from those buffoons.

  7. Gwynneth Rutherford 13th February 2012 at 4:57 pm

    Agog to discover what pearls of wisdom were emanating from the FSA, I tried several times to access the guide. Each time, an icon appeared, advising that “This page is broken and cannot be repaired”!

    Par for the course?!

  8. ………but we still have to do it…………!!

  9. How would we manage without thier pearls of wisdom ?

  10. A classic case of Mushroom Management – keep ’em in the dark and pour sh1t all over them.

  11. Seems to me that we will all ‘suck it and see’ in 2013 and ‘what will be will be’. If that means a second or third job in addition to being an IFA in order to keep the lights on, that’s what will happen. Expect it to be very messy in any event. I have a nasty feeling that clients will start screaming from the rooftops as the full horror of the situation dawns on them, especially those that paid for advice through the life of their investment via massive up front commissions only to find their adviser has gone broke and they now have to pay again for advice. Oh dear……

  12. “Will you stop offering advice to some clients and,
    if so, how will you manage this change to ensure
    that you are treating customers fairly?”
    This is one of the key questions.
    What do they mean? If we are no longer able to offer advice, these peoople are no longer clients, so what exactly do they want us to do? Write out a long explanation of the RDR, which they will not understand anyway? Point them to another source of advice, for which they may hold us liable at some future date?
    The FSA live in cloud cuckoo land if they think we are going to waste time and money doing tick box exercises which will offer no return.
    We are in business to make a profit, that is what business’s do.
    If they want the general public to understand the mess they have created, they should be the ones to educate them.

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