As we approach the RDR deadline problems around the implementation of the new rules continue to rise to the surface.
Last week Money Marketing revealed Santander had suspended its 800-strong team of investment advisers as they do not meet the requirements for “RDR suitability and processes”. The bank has given no indication of when its advisers will be RDR-ready.
The same day it was revealed that most building society customers will be unable to get pensions advice for an unknown period of time as the Legal & General pensions product used by most societies does not allow adviser charging.
There are likely to be more revelations in the weeks ahead as the RDR rules begin to bite.
If large firms with significant resources are having difficulty meeting the FSA’s new rules then it is no surprise that many smaller firms are also struggling.
The FSA’s latest data from September suggests most advisers are likely to meet the new qualification requirements, although there will be a minority who do not. The regulator’s zero tolerance stance of forcing anyone who does not meet the deadline to deauthorise seems needlessly draconian. A three or six month window to ensure advisers who are only one exam away do not need to go through a lengthy reauthorisation process would be a more sensible and pragmatic approach.
Firm transformation and creating a sustainable business under the new charging regime was always going to be a far bigger concern than examinations.
The last minute VAT flip-flopping from HM Revenue & Customs and the pension minister’s decision to launch an urgent review of consultancy charging, which could see the charging method banned, both highlight a lack of joined up thinking between Government and the regulator which has caused needless instability so close to the RDR deadline.
The FSA is hardly one to judge firms on their RDR planning when policymakers have left so many important decisions to the last minute themselves.
The regulator says it will offer some flexibility to firms around charging models as they find their feet in the new RDR world. It must be true to its word and recognise the huge amount of work the IFA sector has done to try and abide by its new rules.
Allowances should be made for any small cracks caused by the FSA’s insistence that its arbitrary deadline is met at all costs.