In calling for a 12-month delay to the retail distribution review and softening of the cliff-edge deadline, the Treasury select committee has listened carefully to the valid concerns of many IFAs and their MPs.
But instead of taking time to consider the balanced TSC report, the FSA swiftly dismissed its key recommendations, showing a pretty shocking disregard for the respected Parliamentary committee.
The drive towards greater professionalism, higher qualification standards and more transparent charging is good news for the IFA industry and its clients. However, MPs are right to raise concerns about the way the RDR reforms are being introduced and the dangers of a significant number of IFAs not meeting the January 2013 deadline.
The publication of the TSC report is the perfect time for the FSA to take a step back and think again about what it truly wants to achieve from the RDR reforms and whether the positives of a delay now outweigh the negatives.
The positives of a one-year delay combined with some flexibility for some experienced advisers on a case-by-case basis are clear. We want as many decent IFAs remaining in the industry as possible.
If a combination of heavy work pressures and a late start in beginning the road to QCF level four mean a significant number of IFAs who would otherwise make the grade are left unable to advice for a period of time then a dose of pragmatism is required.
A softening of the cliff-edge deadline on a case-by-case basis for older advisers unlikely to remain in the industry for a significant period after 2012 would be a sensible way of addressing the anger of those who feel they are being forced out of the industry.
With less than 18 months to go until the RDR deadline, we still await the regulator’s platform rules and simplified advice proposals and there is continued uncertainty over the tax treatment of advice services and what will constitute legacy commission.
It is reasonable to suggest a relaxation of the deadline to ensure the reforms are successfully implemented with as many good IFAs as possible continuing to give advice rather than botched through a dogmatic desire to keep to an arbitrary date.
Throughout the course of the RDR the FSA has consistently failed to take on board legitimate adviser concerns. It may well regret treating MPs in the same way.