Driving professionalism through higher qualification standards and ridding advice of commission bias were the two central tenets of the RDR. So after all the years of agonising and hand wringing involved in rolling out the reforms it sounds absurd, perhaps unthinkable, that we are in for another round of overhauling the advice market in the shape of the Financial Advice Market Review. What, arguably, is even more unthinkable is that those overarching RDR principles could be unravelled in any way.
Yet this is the position the advice profession finds itself in. Money Marketing understands, although talks are at an early stage, that options being considered by the advice review expert panel range from lower qualification standards for certain products and curbs on the sale of unregulated products to bringing back some form of commission.
Instinctively it feels wrong to row back on one of the biggest change programmes the advice market has ever seen, given the blood, sweat and tears it took to get here.
But the RDR has not been without its critics (something of an understatement), and there are those within in the industry who are starting to question whether rewriting the reforms is really that crazy after all.
It is no mean feat the FAMR panel have been tasked with: dream up ways to plug the advice gap for less wealthy consumers and, in the consultation’s words: “give firms the regulatory clarity and create the right environment for them to innovate and grow”.
When faced with such a challenge, and the ambitious timescale to deliver its findings before the Budget, it is no wonder the panel has been pushed to consider yet another radical overhaul.
The argument about creating an advice framework that sits separate to but alongside the RDR has been run and re-run, through basic advice, simplified advice, simple products, guidance, etc. Banks and providers have constantly been trying to chip away at this idea that advice is always fully regulated and therefore must comply with QCF Level 4, with transparent charging structures to boot.
The sticking points that proved the ultimate roadblock with simplified advice remain the same – what consumer protection is afforded for pared down advice, and what are the liabilities for the firms that offer such a service.
Yet at a time when banks, insurers and fund groups seem to have the ear of the Government and the FCA, it seems their pleas to relent on certain aspects of the RDR may finally start to gain traction.
Natalie Holt is editor of Money Marketing – follow her on Twitter here