The retail distribution review is doing nothing to address the problems of millions of people in poor-performing closed funds or those getting poor annuity rates or the widening protection gap, says The Red House director Gareth Marr.
Speaking at Osney Media’s financial services distribution summit in London last week, Marr also attacked proposals for customer-agreed remuneration. He said: “Customer-agreed remuneration is a nonsense. If you cannot sell advice and if you cannot get a client to pay for advice, then you should not be an adviser.”
In a wide-ranging attack, he claimed that the RDR was failing to address the key issues in the market.
Marr said: “There are millions of investors in closed funds and that is one of the big things that is going wrong at the moment. The reason that Pearl and Resolution are going after Friends Provident is because Friends cannot make money on its new business. Pearl and Resolution are making all the money on their closed funds. Will the RDR do anything to address this? No.”
Marr says he thinks the open market option should be the default option for annuitants and that a single central annuity bureau should be set up to provide competitive annuity rates for investors.
He says: “A single annuity bureau would save hundreds of millions of pounds for those people in zombie funds. Does the RDR mention anything about this? No. Does it help with the protection gap? No.”