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FSA: “We have listened on RDR”

The FSA has defended itself against suggestions it has not listened to concerns about the retail distribution review, suggesting the RDR has involved more industry consultation than any other initiative it has carried out.

Speaking at the Tax Incentivised Savings Association annual conference in London yesterday, FSA head of investment policy Peter Smith said differences of opinion on the wisdom of the RDR will undoubtedly remain among some of its critics.

He said: “The RDR has emerged from what is now four and a half years of work involving more formal and informal consultation with industry stakeholders than anything else the FSA has ever done.”

Smith added that the FSA could not be accused of not listening to the industry throughout the RDR consultation period.

He said: “A number of stakeholders will say ‘the FSA just does not listen’; this is a common criticism of regulators. I think the reality in this particular process is that we certainly have listened. We have not agreed with everything we have been told, but we certainly have listened.”


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There are 54 comments at the moment, we would love to hear your opinion too.

  1. I do not dispute that they have listened. What I will ask is will they have taken any notice? This I doubt 100%

  2. Yes, but what part of the industry have they listened to? It does not appear to be the average IFA.

  3. Listened and ignored

  4. I have read some rubbish but this beats all. FSA have listened in one ear and out the other. If they had listened then why have they taken no notice of all what has been said. They are just trying to cover themselves for being totally arrogant.

  5. Who the hell are the Tax Incentivised Savings Association – sounds like it was fun!
    I do hope Peter hasn’t missed out financially on the night and puts in a heftyx’s claim. Cynical me – never!

  6. If they had listened then why are there so many issues and concerns made by so many?

    My guess is they only listened to the large players who will benefit from RDR but the small IFA’s etc may well lose out and whose voice has not been heard.

    If the FSA wanted to get it right they will still be listening rather than saying they have listened and implying the matter is now closed.

    The comment “we have not agreed with everything we have been told, but we certainly listened” does imply that they have their own agenda.

  7. Jennifer Nicholls 18th November 2010 at 1:22 pm

    So if they have listed and understand the consequences, then they confirm that they are trying to stop people gaining Independent financial advice and want people to pay a high price to do so. Only the middle to high class will be able to afford it and there will be fewer advisers to offer advice.
    What is this country comming to. People will be forced to go to the banks and get ripped off.
    I worked for several banks for 20 years and know how they do it believe me.

  8. Listened to the banks!
    The other “stakeholders” ( that always makes me laugh) can put up or ship out.

    This is just political speak for pushing ahead their own agenda.

  9. You could not make it up…….

    Of course we wanted you to listen…………

    Get in the real world…………….

  10. The FSA three wise monkeys “see no objection, hear no objection, and speak no objection”

    Of course this is how the FSA regulated the banks – the soon to be beneficiaries of the decimation of the IFA sector!

    The FSA are saying they: “Involved more industry consultation”, which is total rubbish! The FSA templated the questions they wanted asked and then posted them on a website with no free text options. Surprise surprise they then get only the sanitised pro RDR answers they wanted to hear.

  11. It is disappointing to note the ‘civil service’ mentality that it is acceptable to waste tax payers money on yet another consultation that will deliver what the civil servants originally wanted to deliver and will do so regardless of public or professional opinion, that clearly shows RDR is neither required or wanted by consumers and advisers alike. Who bears the cost of these uneccasery consultations? Yes we all know the poor old tax payer and consumer!

  12. The FSA said this at the Tax Incentivised Savings Association and the irony of this is that the FSA has not even listened to what concerns that the Tax Incentivised Savings Association have about the retail distribution review.

    David Hazelton of Tax Incentivised Savings Association(TISA) 30/10/09: The RDR could be detrimental to consumers both in terms of higher product charges and an increase in the cost of advice, Implementation costs for the RDR are being “seriously underestimated” and product charges will consequently have to be raised.

    I rest my case – there are none so deaf as those that don’t want to hear!

  13. And all this listening & implementation will cost us £1.6 BILLION!

    Quite an incredible number to introdue a new remuneration model and qualification standards..

  14. Vic Jannels - AToM 18th November 2010 at 1:37 pm

    My father often told me off for not listening. I would retort that I always listened. He would reply, “Ok, but have you heard and understood what I said?” Does this ring any bells?

  15. Okay ~ if the FSA has listened, why has it not published for all to see ALL the representations received from the industry to which it offered the opportunity to comment? Thus, we could all see who said what and gauge those representations against what we see coming out of the FSA, which is basically that the RDR will go ahead as planned (by the FSA).

    The FSA’s refusal to publish these representations can only reinforce the widely held and deeply entrenched view that whilst it [the FSA] may claim to listen to the industry, in reality it does nothing of the sort.

    The FSA is apparently unconcerned about the distinction between perception and reality when it comes to commission bias. It seems also to be equally unconcerned about the distinction between perception and reality when it comes to whether or not it takes account of industry concerns about the RDR.

    Publish and disprove those who doubt your word, FSA. Otherwise, we will continue to disbelieve you.

  16. Is he having a laugh?!?

  17. The FSA have so over-engineered the RDR to the point where they have listened to themselves and no-one else.

    Michael, I doubt that they have even listened to the large players.

    They wanted to listen maybe so but they didn’t like the message so they ignored it!!

  18. The FSA are doing to independent advice as Arthur Scargill did to the mines – destroying it

    The only winners will be the Banks – the same sector that seems to administer its own regulatory regime

  19. No wonder we have a problem with global warming, every time an fsa spokesperson opens their mouth more hot air spews forth.

    He said: “A number of stakeholders will say ‘the FSA just does not listen’; this is a common criticism of regulators
    That makes everything ok then?

    If a criticism is a common one, we can simply ignore it or worse point the finger at the critic.

    Will they be around to take the blame when it all unravels or will they be too busy working overtime in the bank?

  20. Peter, you can listen, consult, formulate and procrastinate but it’s outcomes measured against defined objectives that count. You may like to reflect on your own comments to others:-

    To advisers he says:
    ‘If you do not understand the product, you should not sell it. We have seen far too many market problems arising from advisers selling products they have not properly understood.”

    The real issue hear is that the FSA is not ultimately accountable.

  21. Over 30 years in the industry, and I have to read this claptrap. “Cloud cuckoo land” springs to mind. They can’t possibly have listened to the IFA community who understand that this is very bad news for the consumer. The FSA vaunt consumer choice, and exactly the opposite will happen. Thank goodness I retire in mid 2012.

  22. Sorry FSA you did NOT listen. Now trying to provide a cover up against the obvious questions you will be asked to provide answers to on 30th you try and pre-empt the discussion by setting up sound bites to repeat when allowed. Strange how no IFA or consumer had the opportunity and yet we all pay for it. The one question to be answered is,’with all the money spent in pursuit of this can you explain exactly how any single consumer will benefit?’ Go on then answer the question…Same as when polarisation happened…not one person benefitted but a whole new raft of power hungry regulators appeared. Regulation is about maintaining a fair market not decimating it.And on the bandwagon goes exponentially until it has totally destroyed any chance of a recovery in the savings culture we once had…and was once the envy of the western world. Just think long last then there will be no FSA because there will be no-one to regulate.
    There is only one word to describe the RDR. Redundant. Lets have a spending cut here please and do everyone a favour.Anonymous because I have clients to look after and they come first.

  23. It would give greater credence if the FSA would consider their past failings and what they intend to do about ensuring value for money in future. A regulator which offers sweeping changes that reads like a mandate for banks by banks is extremely frustrating to bear. Especially when fees are increasing on the back of their previous failings. I have never had a complaint, have countless satisfied customers and yet feel I am being told myself and my clients are untrustworthy. RDR and MMR is another expense paid by the industry and generally considered flawed. A review of their own failings should be their top priority, not spending other peoples money to cover-up past bad ideas and implementing more unnecessary change. I wish they would actually do with something to help the people of Britain, like closing unfair tax loopholes or getting transparency in hedge fund markets.

  24. Listend maybe, but taken absolutely no notice.

    Either that or they have been very selective in who they are listening to!!

    I have no doubt they will have listened to Which? magazine, or The Mail on Sunday!!

    How about listening to ‘people on the ground’….. oh sorry you cant, they are all busy preparing for TCF interviews, preparing for exams, preparing for RDR, preparing for new Capital Adequacy requirements, or performing due dilligence on Wraps, or reding the new Wrap consultation, or learning the new pension rules, or (heaven forbid) actually seeing clients (I think I can remember seeing clients!!).

  25. FSA – on the defensive says it all.
    They know what they are trying to do, it is a Nu Labour inspired organisation rooted in the centralise and control everything mentality its natural home eastern Europe in the 1970’s and as successful too.

  26. I cannot recall the FSA sending out any paper questionaires I can recall a research company telephoning with a list of yes/no answers to which I could neither answer yes or no. I am afraid the dice have been well and truly loaded from the outset. I wonder why?

  27. Approximately one million new Workplace Pension Schemes will need to be put in place between 1st September 2012 and 1st July 2016. The vast majority the schemes with 50 or less employees from 1st July 2014.

    It appears that the FSA with its RDR examination requirements is trying to ensure all advisers reach Level 4 before this exercise commences. This is not disimilar to the Financial Services Act 1986 rules which introduced adviser comptency requirements prior to the contracting-out of SERPS from July 1988.
    However with the bulk of the new Workplace schemes not requiring any advice before 2014, I believe that advisers should be given a least two more years to reach Level 4.

  28. There can be no doubt that implementing the RDR will decimate the number of IFAs and leave the general public to the mercy of the banks. The FSA has been far too close to the banks in seeking to implement the higher Treasury policy objective of closing the savings gap by giving the banks a clear field. The Coalition Government should delay the implementation of the RDR in order to better understand the negative effect it will have on the general public’s access to independent advice.

  29. Makes you laugh…………. RDR doesn’t do anything for anyone or anything except the FSA, who use it to justify their very expensive existence.
    I feel proud to be part of such a wonderful industry

  30. “A number of stakeholders will say ‘the FSA just does not listen’; this is a common criticism of regulators”.

    All regulated business suffer the same fate, regardless of what sector they are in. Regulators are paid to make rules and that is what they do. After 20 years there are so many rules that obeying them becomes virtually impossible.

    Small companies do not have the resources and are regulated out of business. Large companies (banks mainly in our world) can afford to employ people whose sole responsibility is to meet the regulators rules. They also have deep pockets and can pay up when the regulator decides they have done something wrong.

    This is why Britain has identikit high streets, identikit service industries and identikit pubs, dominated by large companies. Innovation is squeezed out as smaller players are prevented from playing at all.

    The RDR adds more rules and will benefit no-one.

  31. Peter Smith talks unadulterated cobblers. I would suggest that any future speeches like this one are marked Ship High In Transit.

  32. Some years back I was involved in a group that were fighting the efforts of Herts CC to close our local village school.

    The Council addressed the issue by way of a consultation. Having heard from parents, teachers, children, local councillors, the MP and various other interested parties they chose to go ahead with closure plans. The consultation was a farce.

    Does this sound familiar.

    An interesting postscript is that the school was saved after a representations wasmade to parliament.

    Peter Smith may believe that the FSA has listened, hiwever his own words make clear the full folly of this pernicious exercise.

    “Product bias will still be possible within the market but I do not think it is a feature of the restricted channel, I think it is a fact of life.”


    “We are trying to achieve a market which allows more consumers to have their needs and wants addressed. If consumers still do not want to engage with it then we probably will have to do something else.”

  33. The soviet socialist republic of the FSA listens but doesn’t hear.

  34. Yes the listened but to who? The banks, insurers but not the average person who benefits from independant advice or the IFA. They listened to the ‘lobbists’, organisation with vested interests and huge sums of monies with which to lobby (is that not bribery?), people who could offer them well paid positions when they have left the FSA. We of course had no-one to speak for us, AIFA – toothless appologists and our networks??????? – next to useless! Up until now, we the adviser have kept the banks / insurers ‘in check’ by ensuring that the ordinary individual has has the best advice and has obtained the best deal. We have been the unpaid police of the financial world. Now the masses will be left with no other option than to get ripped off by the bancassurers and this with the compliance and duplicity of the FSA.

  35. This is simple.

    Publish the all results of the consultations including all the hugely expensive independent surveys carried out on FSA’s behalf and those of the ABI and the legal opinions supporting it etc.


    Accept collective responsibility together with the FSA and all individuals responsible for the RDR. When the RDR fails (and be assured it most certainly will), pay the price all advisers pay for its failure.

    I fear the comment mentioned by Alan Lakey says it all – we’ll try something else – easy isnt it ??

  36. Did the FSA listen to any of these:

    Otto Thoresen – CEO Aegon: “The RDR is only helping wealthy customers”

    AXA April 2009:”We will lobby the FSA to make sure the RDR does not mean less are able to access advice”

    David Cox – SuuqeaMarch 2009: “Two million clients could be left without an IFA after RDR – 40% could leave the industry”

    Shaun Crawford, head of insurance advisory at Ernst & Young, 26/06/09 The FSA’s Retail Distribution Review will have the following effect: Of a population of over 30,000 advisers, many industry commentators are expecting at least a third to leave by 2012.

    AVIVA Life marketing director David Barral has said the firm predicts by 2013 IFA numbers will fall to 10,000 in total as advisers fail to comply with RDR changes, leaving middle-market consumers unserviced. No surprise then that Aviva wants to grow its tied in-house channel to target 2.7 million ‘orphan’ clients whom were originally IFA clients. So much for consumer choice!

    Robin Stoakley, Head of Intermediary Business at Schroders said, “I do see up to 30 per cent of the IFA market leaving”.

    Figures provided by Matrix-Data Solutions (in June 2010) showed there were 32,000 advisers in 2008. However, this plunged to 30,198 in 2009 and currently stands at 28,714

    A study by Oxera during May 2010 showed that a quarter of advisory firms could leave the market.

    Stephen Gay – Aviva June 2009: “The regulator has failed to consider the danger of adviser charging limiting access to advice for those on lower incomes”

    FSCC January 2009: “Financial advice will be less widely available post RDR”

    Institute of Financial Services: “RDR will impair financial advice before improving it”

    Alasdair Buchanan Scottish Life November 2009: “Sales advice is a real cop out and extremely confusing to investors”

    Lord Lipsey: “Consumers in the middle (not high net worth or money guidance fodder) to be sold products by banks under the contradiction that is sales advice”

    Walter Merricks former Chief Ombudsman: “I think it would be unwise to count on the assumption that complaints from the retail investment world are suddenly going to go down as a result (of the RDR)”

    Deutsch Bank report August 2009: “Dwindling IFA numbers in the lead up to the implementation of the RDR will have a dramatic effect on the UK life industry. It will have a negative effect on new business volumes for insurers. There has been industry talk of 30% or even 50% of IFAs exiting the industry post 2012, which is not impossible.”

    Paul Selly HBOS: “Bancassurers set to benefit”

    Richard Howells Director Zurich LifeJune 2009: “The big question mark is still around what benefit it will have for the ultimate consumer. I am still not convinced that all of these changes, when you sit down with a consumer and explain them, actually give rise to a consumer benefit that I can really hang my hat on.”

    Martin Lewis Money Saving Expert June 2009: “There’s a worrying possibility that the FSA is about to kill off independent financial advice in the UK for all but the wealthy. I do hope I’m wrong. I’m not convinced most people will want to pay for advice. The commission route has the advantage that you don’t pay a fee each and every time you want information; you can go without the worry of laying out cash. What I find most galling though is that bank-based advisers – those primarily responsible for PPI misselling, endowment mis-selling, investment mis-selling and generally poor advice all round are still to be allowed to be remunerated based on the number of sales.”

    Janet Walford OBE, Editor Money Management Sept 2009: “I am not paranoid enough to believe that the FSA has a hidden agenda to do away with small IFAs, but the law of unitended consequences may well mean that this will be the result. This is especially the case when set alongside the myriad of other proposals that are costing some £430 million to set up, with ongoing fees of £40 million pa thereafter, a mind boggling amount of cash.

    Peter Hamilton barrister, Source: Money Management Oct 2009, Scrapping the FSA by Marie Jennings MBE: “The Financial Services and Markets Act does not permit the FSA to cancel an authorisation simply because the FSA has changed its views on what the appropriate qualifications should be….It is one thing to impose new rules for new entrants to the IFA profession, it is quite another thing to disqualify someone who is already qualified.”

    David Hazelton of Tax Incentivised Savings Association(TISA) 30/10/09: The RDR could be detrimental to consumers both in terms of higher product charges and an increase in the cost of advice, warns the Tax Incentivised Savings Association(TISA). Implementation costs for the RDR are being “seriously underestimated” and product charges will consequently have to be raised.

    Bankhall managing director David Golder 03/11/09: “We say write to the regulator, write to your MP. Do not let the FSA get away with some of the things that will lead to the widespread decimation of our industry.”

    Robert Kerr, head of retail distribution development at Scottish Widows says: The RDR could have the unintended consequence of “disenfranchising” the majority of consumers from financial advice. “Our key concern is the RDR proposals will act to drive advice upmarket, with financial advice becoming the preserve of the wealthy leaving mass-market consumers un-served,”

    Nigel Waterson when Shadow pensions minister : “While no-one can object to raising the standards of training and competence, should an emphasis on exams take precedence over on-the-job training and experience? Is the 2012 implementation date practicable given the extra qualifications and changes in systems that will be required to be in place?

    Richard Hobbs Director Lansons Regulatory Consulting 16/07/10: “I have to say, it (RDR) only just survived an executive committee meeting in March 2010 at the FSA. The FSA are not particularly proud of the RDR but it is a question of losing face, so I think they will carry on.”

    Nick Cann chief executive of IFP 30/09/10 said: “The FSA must develop a “catastrophe strategy” in case it reaches June 2012 and half of advisers are not yet meeting the RDR requirements.”

    Martin Lewis founder 21/10/10 has echoed warnings the RDR will reduce access to advice. Giving evidence to the Treasury select committee Lewis said: “By the nature of what I do, I deal with a wide spread of the public. I worry that if you ask people to pay for financial advice, they will not pay.”


    Consumers will suffer substantial and unprecedented detriment due to the unintended consequences. A substantial portion of the adviser population will leave the industry.

    Various surveys have been conducted and whilst there is no consensus on the figures it is obvious that adviser numbers will fall drastically.
    If the adviser population falls by around 1/3 this will leave millions of consumers without an adviser. Some will migrate to other advisers but many will be left without a trusted source of advice. Please note that the advisers who deal with the smaller investments of the typical everyday client are the ones who are most impacted by the proposed changes.

    The UK currently suffers from the largest savings, retirement and protection gaps in its history. It is essential that these gaps, and the current over-reliance on the state, are reduced. The UK can ill afford to lose 10,000 advisers, a catastrophe that will intensify the existing problems.


  37. Perhaps if you bother to read this link you will understand that the IFA must speak a type of Martian that the FSA hear as french!! maybe its the accent!

  38. An overwhelming response as we can see and the FSA say they have listened. Who to I ask myself?

  39. There is a huge difference between `hearing` which requires very little action, and `listening` which involves accepting other viewpoints,and considering possible other options to move forward.I wish that I could see more positive words from FSA that really suggest that all this is really being done for the sake of clients,and not mere administrative adjustments that will undoubtedly be altered time and time again, in the interests of ?

  40. Listening is making an effort to hear something, what you do after you have heard it is another matter altogether, whether you understand what you hear impacts upon the decision you arrive at, if some of what you hear is louder than anything else you hear it can influence the outcome.

    In my humble opinion you may have listened but you didn’t hear it all in a way which would ensure you arrived at a balanced and logical conclusion.

  41. FSA head of investment policy Peter Smith said differences of opinion on the wisdom of the RDR will undoubtedly remain among some of its critics.
    Wisdom? What wisdom? The fsa do not know the meaning of the word.
    Why do people like smith continue to believe they know better than everyone else?

  42. 21 years experience as a competent adviser plus over 10,000 hours training (seminars, examinations, tests, technical reading, courses etc etc) = ZERO

  43. Yeh, Listened to the Banks

  44. Guess who is on the “Banking Liaison Panel”
    you got it!

  45. I would have loved to comment earlier on this delusional drivel. Unfortunately I had to go out and earn enough money , so that some overpaid muppet at the FSA could get into their chauffeur driven limo to go & purchase more Fine Art.

  46. Listening with your hearing aids turned off doesn’t count.

  47. It is all very well listening to the industry but have the FSA talked to the general public. I have and they do not want to pay a fee but are happy with the present arrangement. It appears that the FSA are trying to drive our customers into the arms of the banks. They do not appear to care for the small investor.

  48. Why should they listen to IFAs?

    Do IFAs deny the existence of cowboys? Do the RDR nay-sayers offer a way of eradicating them? Too many “status quo does me fine” attitudes on display.

  49. Listening is not the same as understudying. It is not the same as discussing. It is not the same as reacting. It is the same as saying, Go Away.
    There is little in the current RDR package that was not in the original document, so there has been little movement, little adaption to the realities of the market.
    Listen in the the sense that the FSA use the word can mean one of two things. I have heard what you say but do not understand so I am going on with my original thought process (insecurity) or I have heard what you say but don’t care (bully). Either stance should be unacceptable in a modern democratic society.
    There is nothing in the RDR documentation that is based on facts; there is nothing that is market driven; it is the ramblings of a White Tower Committee who do not have the strength of purpose to admit that, whilst the sentiments are good, the implementation is, we believe, massively counter productive.
    Based on the current debate the most obvious outcomes of the RDR are increased costs through regulation, increased costs through compartmentalisation of the industry, increased costs through lowering of competition.
    The consequence, as specified by so many commentators, is that the advisor market will be even more orientated to the wealthy classes. I have asked till I’m blue in the face with asking, but can anyone explain why the FSA is spending millions of pounds protecting the rich. If any class is able to look after themselves it is the rich. Nothing that I can see in RDR relates, in practice, to the mass of the population.
    Serendipity is a wonderful concept, and I think covers the fact that I came across this quotation the same time I wrote the above. It does seem to encapsulate the FSA in a minimum of words.
    “Power corrupts. Absolute power is kind of neat”.   – John Lehman

  50. Most of these posts indicate the angry contempt in which almost any utterance from the FSA is held. Perhaps they may be summed up thus:-

    Okay FSA, you say you’ve listened. But none of us out here are able to see what you’ve actually done about anything that’s been said. Hence, we don’t believe you.

  51. Have the FSA really listened? Their one minute guide to adviser charging suggests not – this is a section from the “questions and answers” part:

    “Consumers will not pay a fee for my advice – I will lose business. Isn’t this going to reduce my income?
    Our aim is not to restrict the ability for consumers to gain access to advice or to drive IFAs out of the industry. We understand that some clients will not be able to, or at least will not want to, pay a separate upfront fee for advice – so you could use alternative measures to ensure that you are paid for your advice services, such as regular contribution products.”

    So, if a client can’t pay an up front fee, we should sell them something!!! How does that work in the real world?

  52. I tape recorded the obligatory IFA “consultation held at the FSA’s HQ in Canary Wharf. It was a “tell and sell” operation. Indeed IFAs complained vociferously to the FSA presenters at the time that it was not a consultation; it was a cynical exercise in “spin” and a waste of time and unnecessary expense for many IFAs there present.

    It is my view that the FSA is not telling the truth on this one. The only people they appear to listen and support are the bankers. They – and their erstwhile political masters should hang their collective heads in shame for letting the country down so badly for their “light touch regulation” of the banks, and for rewarding themselves rather too well in the process. Come to think of it, they behave rather like bankers, which many of them were of course.

    The Apparatchiks heading the FSA would have done well to have read Niccolò Machiavelli’s “The Prince” for guidance on successful “Machiavellian” behaviour. Unintelligent and ersatz “Machiavellian” spin – “spin” is a kinder word for lies and propaganda – has a short shelf-life and brought down the previous government. But hey, the FSA’s pro-genitor was the last government, and they just like the previous government are no longer acceptable. The FSA is on its way out, yippee and good riddance.

  53. My wife says that I don’t listen to her, or something like that.

    Either the FSA haven’t listened and they should be ashamed or they have listened and with the RDR have done the near impossible in getting almost everything wrong and again should be ashamed.

  54. Peter Smith was responsible for one of the last “RDR” online surveys conducted. I spent 3/4 hour giving answers until the question about what was RDR going to cost my business. I had no idea and contacted the FSA to say so- It was suggested I put in a fictitious figure since I could not complete the other half of the survey. I then tried to contact Peter Smith only to find that the FSA do not publish email addresses to mere IFAS. After obtaining Peter Smiths from AIFA I wrote and explained how futile the survey was following my experience. I am still waiting for an answer – Is it surprising that very few responses have been received to so called “consultation” ?

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