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‘Loan brokers in RDR denial’

Mortgage brokers are in denial about the retail distribution review and its likely extension to the sector, according to Tenet group distribution and development director Keith Richards.

Richards says it is inevitable that RDR will be extended to mortgages, with the FSA leaving the door open to this possibility in its interim report.

He says: “I think a lot of mortgage brokers are in denial and will try to argue that it should not be applied to the sector but I do not see how this could not eventually happen.

“When you read through the initial RDR paper, I think there are very clear indications that it will be extended to the mortgage sector. It recognises the fact that over 50 per cent of advisers have dual status and operate both in the investment and non-investment sector.

“The regulator suggests that it would be a good thing if firms in mortgage sector adopted similar principles if they work in both sectors. For us, that simply means that whatever standards we apply to one sector of professional advice we should apply to the other – probably not to the same degree but I do not think you can separate the two.”

Richards believes that by burying their heads in the sand, brokers are missing out on an opportunity to shape the future regulatory landscape.

He says: “There is a very clear indication from the FSA in the document that it wants industry-led solutions rather than regulatory-driven rules.

“The one great opportunity that the industry has here is offering appropriate solutions that are better for both advisers and the consumer so that the regulator is not forced to impose any.”


‘RDR will drive consolidation’

Consolidation is set to accelerate in the intermediary sector this year as the retail distribution review shakes out the weaker performers, predicts Cavanagh group director Simon Redgrove.

Schroders adds Middle East analyst

Schroders has appointed Maha Soueissy as Middle East equity analyst. Soueissy joins from SHUAA Capital and will be based in the Dubai office.

Tax and figures

Offshore insurance bonds offer a number of potential tax advantages. These include the fact that capital growth within offshore bonds is virtually free of tax, policyholders can switch between funds within bonds without triggering a capital gains tax liability, bonds can be assigned to lower-rate taxpayers and the policyholder can decide when to cash them in and thus when they face their tax liability.


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