Large distributors have backed the Treasury select committee’s call for a 12-month delay to the retail distribution review.
The TSC has urged the FSA to delay RDR by a year to give advisers extra time to meet QCF Level 4 requirements and soften the “cliff edge” cut off date amid concern experienced advisers would be forced to leave the industry.
Openwork believes the 12 -month delay could result in a significant increase in the number of advisers remaining in the industry. Recently appointed chief executive Mary-Anne McIntyre says: “We believe a 12-month delay could result in approximately 5-10 per cent of additional advisers making the journey. Spreading the load over two years rather than one will be a fantastic help at a very difficult time for advisers.”
SimplyBiz joint managing director Matt Timmins agrees a 12-month delay would be a positive move for the industry and consumers. He says: “Whilst we have known about the RDR for some time now, the fact is we are still dealing with consultation papers and waiting for the final rules to be issued. Furthermore it has taken a great deal of time for alternative exam routes and more alternative assessment routes to become available meaning many advisers have not been able to achieve level 4 yet who fully intend to.”
Sesame says the delay would allow a further 500,000 clients to continue to be serviced by their adviser. Sesame Bankhall group executive chairman Ivan Martin says: “We are pleased the TSC has listened to our arguments and we welcome their recommendation. We estimate this delay could mean an additional 500,000 clients across the UK could continue to receive pensions and investment advice from their IFAs, who would now be able to qualify in time.”
Foster Denovo chief executive Roger Brosch says advisers have only recently been given certain clarity on the RDR and that the FSA should take this into consideration by putting back the implementation date.
He says: “I think having a bit more time would be useful. Many in the industry are only just waking up to realise the implications and certainly the FSA has only recently given clarity on certain issues. I do think it is appropriate the FSA has to be held to account in a familiar way. Twelve months would be a magnanimous gesture giving everybody plenty of time.”
But a delay would be unhelpful, according to AWD Chase de Vere head of communications Patrick Connolly. He says: “Advisers have known about this for a long time and have been given more than enough time to reach required levels or be well on the way to reaching them. Advisers who have made the effort to be ready do not need a delay.”
Whitechurch Network managing director Ian McIver suggests any delay should not be announced until closer to the deadline. He says: “The biggest problem with putting it back a year is how many people will close study books and forget about it for another year. You are better off announcing the delay at the last minute because if you announce it now you will end up with people in the same position as they are now in 18 months time.”
Aifa has backed the TSC’s call for a delay whilst the CII and ABI have urged the FSA to continue to resist the MPs’ proposals. Aifa director general Stephen Gay says: “The recommendation to remove the cliff edge date for qualifications, and consider cases on an individual basis has been a key Aifa suggestion, and one which will maintain maximum access to experienced advisers. We hope the regulator responds positively to these sensible proposals.”
Threesixty commercial director Phil Young says there has been a lack of leadership over the issue and it is unfair to give advisers false hope of a delay if the FSA decide against it.
He says: “There is certainly merits for a delay but it is completely unacceptable to continue to have a debate about it after five years of discussion. There has been a shocking lack of leadership over this and the fact that every man and his dog have had the chance to stick their oar in and lead advisers along is absolutely unfair. The time for discussion over this has been and gone and a decision is needed immediately.”
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