Legal & General Wealth Management director of new distribution Danny Wynn says providers and advisers need more information about legacy business from the regulator in its June retail distribution review consultation paper in order to restructure their systems before the implementation deadline.
He says: “The major problems with adviser charging will occur in relation to legacy products. Unless we find out how they are to be treated by June, the timescale will become almost impossible.”
Wynn insists that Legal & General is not concerned about the financial burden of making the changes.
He is also critical of the FSA’s proposals to tie its higher capital adequacy requirements for advisers to the same 2012 deadline as the RDR. He says: “It is going to take firms two to three years to replace the lost income they will face as a result of changing their business models.
“We certainly expect to see higher levels of capital in firms but I do not see why the FSA cannot take a more relaxed view and extend the timescale.”
An FSA spokesman says the June consultation paper will “touch on” the issue of legacy products but could not confirm whether any comprehensive proposals will be put forward.
He says: “We recognise that there are products that exist now that will also exist after 2012 and we recognise the need to address the implications of them under adviser charging.”
But the FSA says it expects advisers to be able to meet the capital adequacy and RDR requirements simultaneously despite current market conditions. It says the deadlines have to be aligned because of the connection between the two issues.