It has been easy for politicians and advisers to attack aspects of the retail distribution review. It will be harder to push forward with palatable solutions to address the huge amount of concern in Westminster and around the country.
Political pressure on the RDR is likely to increase in the new year with the Treasury select committee consultation and a promise from backbenchers to continue to highlight the plight of a significant proportion of IFAs.
The main focus of MP concern has been worries expressed by experienced advisers about getting the required qualifications in time. This has led to calls for experienced advisers to be automatically grandfathered into the new regime. The FSA has raised concerns in the past that age discrim-ination laws would prevent it from only providing grandfathering to those with a certain number of years’ experience in the industry.
If the regulator is correct, then there is a big worry that advisers with limited experience, and particularly poorer quality advisers working for the banks, would be able to be swept through on the coattails of advisers with formidable levels of experience.
In addressing the legitimate concerns of a certain demographic of advisers, the FSA and the Govern-ment must not retreat from the great strides being taken to improve professionalism within the industry.
To be successful in campaigning for changes to the RDR for experienced advisers, a robust alternative must be presented to the TSC and the regulator.
The biggest room for manoeuvre is around the current cliff-edge dead-line of the start of 2013 to ensure that all staff giving advice are fully qualified up to QCF level four. Many advisers are concerned about passing all the exams by that deadline to remain in business and a more gradual introduction of the new qualification regime would be welcome.
In the past, professional bodies have floated the idea of a sunset clause arrangement, where older advisers agree to leave the industry within a certain period but are allowed to continue to practise, potentially with stricter regulatory oversight. Licensing arrangements and an increased focus on CPD to prove competence have also been suggested.
To win a lobbying campaign, advisers must ensure any amendments to the RDR are pro-consumer and do not turn the clock back on the move to higher standards.