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Making Sense of the latest RDR Papers

The Ideas Lab directors Rob Reid and Roderic Rennison say their RDR matrix will help advisers focus their businesses to meet the challenges of the retail distribution review.

The FSA’s latest professionalism consultation paper on the RDR, published earlier this week, along with the separate RDR papers published in March this year, have generated many column issues but each paper has been examined more in isolation than collectively.  

The emerging challenge for providers and advisers alike is to digest and then apply these papers with the earlier RDR Papers– for example those relating to proposed future requirements for capital adequacy.
 
To help our clients better understand the impact on their particular part of the market and to help them compare the impact on other parts of the market. We have created an Impact Matrix (see below) in an effort to help them with their ongoing planning for a much changed marketplace.
 
The Matrix considers 12 factors that are likely to impact on the 16 main partied involved in the financial services market. We have adopted a classic red – negative impact, amber – neither negative nor positive impact, and green – positive impact “scoring” system to enable the reader to obtain a quick overview.
 
So, for example, taking fee based financial planners (third from the bottom on the vertical axis,) we think the impact of the FSA’s latest papers is largely positive or of little impact depending on the various factors driving change across the horizontal axis with the exception of capital adequacy.
 
In direct contrast, we think the small IFA (second down on the vertical axis) is negatively impacted in a far greater number of areas – especially in areas such as adviser charging and that protection sales – where commissions will continue to be permitted – is one of the few areas that are positive for them.
 

Inevitably, our views are to some extent subjective, but at the very least you the reader, will be challenged to think about the various factors and what they might mean for your business or employer. If this prompts you to act to talk to your colleagues to consider how you can best act to take advantage of the positives and to mitigate the negatives, then the Matrix will have served its purpose.
 
If you would like a free PDF version of the Matrix, please contact us at: info@theideaslab.co.uk

Click here to view RDR Impact Matrix.

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