View more on these topics

MM leader: Europe could undermine RDR plans

It was always likely that some tough negotiations would be required by the FSA to ensure the RDR is not derailed by European legislation.

A leak of the latest draft of Mifid II, revealed last week by Money Marketing, highlights the size of the task.

It suggests the European Commission is looking to ban commission for independent advisers but not for other forms of advice.

If this was translated into the final rules, the FSA would need to agree an exemption with the European Commission to allow it to continue with its ban on commission for all forms of investment advice.

The FSA had trouble trying to convince the EC of the need to gold-plate the original directive, with the regulator forced to drop mandatory use of the menu and IDD.

With the commission currently looking to push through directives on a maximum harmonisation basis, it is in no mood for national regulators adding their own bells and whistles.

The FSA’s best bet is negotiating to ensure the final directive is worded to complement, rather than undermine, the RDR.

The UK has a unique financial advice landscape within Europe and undertakes a constant battle to guard against the unintended consequences of new rules.

The FSA’s RDR reforms have many supporters in Europe, for instance, the Netherlands is looking to ban all commission, and the regulator will hope other states will help it press its case to extend the commission ban.

But, with the horse-trading that takes place behind the scenes in the formation of such directives, it is by no means certain the FSA will prevail.

The RDR reforms were drawn up as a complete package. Allowing an unlevel playing field through the different treatment of independent and other advisers would completely undermine the goals of the review and lead to a market distortion which would more than likely favour the banks.

The FSA has always argued that waiting for Europe to update Mifid before finalising the RDR would lead to a loss of momentum for the reforms and that, as the EC agrees with the general direction of the review, there was no need to take a waitand-see approach.

This faith will soon be tested. If the FSA fails to win this critical argument, it could cast a shadow over much of its reforms.


Atkinson back at Openwork to build up recruitment

Openwork has appointed Keith Atkinson to the new role of business acquisition director. The appointment comes as Openwork splits its support and recruitment business in order to establish a standalone adviser recruitment operation following a review by managing director of distribution and marketing Mark Duckworth. Atkinson returns to the network from specialist mortgage and protection […]

Kensington blames Irish crisis for negative equity

Kensington Group’s exposure to the Irish market has led to a quarter of its mortgage book falling into negative equity. Its parent company Investec revealed in its accounts that Kensington Group, which incorporates Kensington and Irish lender Start Mortgages, had 24.4 per cent of its loan book at an LTV of more than 100 per […]

HMRC helping to remove artificial gains

An investment bond offers investors certain tax advantages, one of which is the ability to take partial surrenders from the investment. This facility allows the policyholder to withdraw amounts up to 5% of the amount invested each policy year on a tax deferred basis, without incurring any immediate tax liability. This tax deferred allowance can […]


News and expert analysis straight to your inbox

Sign up


There is one comment at the moment, we would love to hear your opinion too.

  1. I have never been a fan of the European Commission as I think it is as undemocratic as FSA itself. However if the FSA is unaccountable to TSC and all other Government departments in the UK, I do welcome the European Commission’s interference.

Leave a comment