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Large distributors support TSC call for RDR delay

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.”

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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.”

Should the RDR be delayed by 12 months? Vote here.

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Comments

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

  1. What a telling headline:
    “Large DISTRIBUTORS (my emphasis) support TSC call for RDR delay”

    Well, I daresay if I ran a distribution firm (I don’t, I run an advice business) I’d clutch at any straw that might result in me keeping a few more customers.

    For crying out loud, how much longer do people need to wake up, smell the proverbial coffee and get on with it, like the rest of us have?

    Even another five years is unlikely to make a difference to those people, unless, of course, they hope to have retired by then.

  2. Andrew Watkins 19th July 2011 at 9:27 am

    Ahh all is clear now, large firms putting pressure on MPs, sounds familiar dose it not. They can see profits falling as those who either hid thier head in the sand or couldn’t be bothered suddenly(?) find they are no where near being qualified. Tough I say, everyone knew the terms of engagement and those of us that have got on with it should reap the rewards, but as normal I guess MPs will cater to the lowest common denominator.

  3. Quote “Spreading the load over two years rather than one will be a fantastic help at a very difficult time for advisers”

    What utter rubbish.

    What about the last 4 years?

    It’s clear, if they can get a delay today, they will ask for a further delay tomorrow – and then it will never come in.

    No where’s that 8% initial commission quote gone, it will be good for another 3 years at this rate………

  4. These are the champions and especially Simplybiz who have maintained a voice of reason. Lets hope that many more will not join this call.

  5. @Paul Howard | 19 Jul 2011 9:35 am 19th July 2011 at 9:51 am

    Paul check your facts old boy. The FSA have only recently 11/01 issued the penultimate table showing the confirmed QCF Level 4 legacy and newqualifications. Your last four years is made up of guesswork!

  6. I’m looking to change career and have managed to pass two level 4 qualifications with no prior knowledge. All this whilst in full time employment and during a tour of Afghanistan….come on, further delays are a joke!!

  7. As one of those quoted in the report, the fact that the evidence put forward at great expense by the FSA to justify qualifications was to quote the TSC ‘weak’ actually underscores the fact that one of the original reasons for the RDR as quoted by McCarthy at Gleneagles ‘ the distribution model is broken’ is shown up by all this for the lie it actually is !!! Forget the 1 year delay there is no justification for it in the first place !!!

    I actually believe that the qualifications requirement is actually illegal and should have been tested in a Court – perhaps it will be ??

    As far as the same old arguments about fee charging professionals being best – that simply doesnt hold water in reality – if it did the mass market would have already migrated to them – they have not what does that tell you ??? In a free market THE market decides NOT the FSA or a naive fee charging weath manager who perhaps has a vested interest – To the likes of them – just get on with it and leave the rest alone – you have nothing to fear from us old dinosaurs do you – remember the market ALWAYS decides who suceeds and who fails thats the way a market works !!!

    As a senior member of the Adviser Alliance, I am also pleased to see the amount of submission taken on board by the TSC – unlike AIFA – that too speaks volumes !!!

  8. What a total farce this all really is – We have investment houses and platforms STILL awaiting confirmation of how they will have to operate their businesses post RDR, with probably up to 6 versions of every fund being required as things stand ??????? Then, as correctly pointed out in a previous comment, we have the FSA (as usual) announcing things that haven’t been properly thought through, finalising the QCF level 4 position in Jan 2011! Many IFA’s have actually waited to find out what, exactly, they are being asked to do in black and white – not unreasonable, I would have thought – instead of running round like deranged turkeys voting for the FSA’s Christmas; I’m beginning to think there are a lot of masochists out there who like being beaten with the FSA’s barbed wire stick for some reason. It’s not about “bleating”, it’s about basic common sense. Is there any other organisation other than a government Quango such as the FSA , that in the real world could demand a course of action before they’ve decided what it actually is? It’s like getting a civil engineering company to build a suspension bridge and draw the plans when they’re three quarters through the build, and then everybody wondering why they’ve got problems!

  9. All advisers that now have an RDR ready proposition should support sticking to the Jan 1 2013 deadline. The impact RDR will have on the market in the years following that date will be immense and the surviving firms will be much more profitable and saleable then they ever would have been before. What would happen to estate agent fees if most of them went out of business? How much would you need to pay to get your car serviced if there were precious few garages left? The golden age is almost upon us but it will be financed by consumers who I thought were meant to be the winners out of all this. Ah well, we didn’t make the rules…

    The qualifications requirement is in fact illegal but as usual nobody will dare test it in the Courts I doubt. And yes, fees will lead to complex, waffly advice that builds in expensive servicing needs. Try getting a succinct, brief piece of advice from a law firm or an accountant. Very few of them are poor however.

    I for one just want RDR over and done with, it has all gone on far too long.

  10. Wow, Anonymous 10.12, great job!
    Maybe studying whilst under machine gun attack my help focus a few advisers’ minds over here!

  11. Yes Anon 9.58
    Talk about biting the bullet!
    is your real name Arnie? If you do decide on a career change, a few years from now you will realise facing the Taliban is perhaps not as bad as facing the FSA.
    At least you can fight back against the former.
    No disrespect to any serving soldiers who have my full respect and admiration.

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