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MPs eye review into impact of RDR


The Treasury select committee is considering whether to carry out a review into the impact of the RDR and whether it has damaged access to advice.

Conservative MP for Wyre Forest Mark Garnier, a member of the Treasury select committee, has asked for the issue to come before the group of MPs, though no decision has been made to carry out an inquiry at this stage.

Speaking to Money Marketing, Garnier says if the committee decides to go ahead with an inquiry the hearing will be timed to give the initiative enough time to “bed in”, and would not take place before the middle of next year at the earliest.

Garnier says: “This is something I personally feel very strongly about. My benchmark is can the savers who are putting away £50 to £100 a month get access to good independent financial advice. If the RDR has resulted in people being denied that access, then against my benchmark clearly the RDR has failed.

“People will have different measures of success. FCA chief executive Martin Wheatley will argue the RDR has been a success because now everyone is qualified to the higher QCF level four. My benchmark would be has the number of firms targeting the lower wealth quartile of the population increased or decreased as a result of the RDR. If it has decreased, then we have a problem.”

A spokesman for the Treasury select committee says while no inquiry has been agreed at this stage “the possibility of conducting further work on the RDR next year has been discussed by the committee.”


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There are 34 comments at the moment, we would love to hear your opinion too.

  1. Mark Garnier, has been a voice in the wilderness, as no one wanted to back him up.
    The industry has been sold down the river, along with millions of the general public, shame on you!

  2. I can tell any MP who wants to know that the RDR has severly damaged independent advice to the ordinary investor. Especially those who cannot bring themselves to pay fees for advice. They will have now been subjected to advice depending on products not necessarily clients’ needs. Qualifications can only have helped up to a point but do little for the ‘on the job’ learning. Also many, too many, vaery experienced IFAs have lost their livlihoods because of the failure to allow ‘grandfathering’.

  3. Next year is too late areview shold be done soon. I like a lot of other advisers am not prepared to advise someone on saving anything less than £500 pm or £100,000 as a one off. All advisers should write Mark and tell him

  4. We will not now see clients who have less than £50000.00 to invest.
    Garnier is full of hot air.
    This will come to nothing. The FCA, like the FSA will tell the TSC to do one.

  5. Garnier says: “This is something I personally feel very strongly about. My benchmark is can the savers who are putting away £50 to £100 a month get access to good independent financial advice. If the RDR has resulted in people being denied that access, then against my benchmark clearly the RDR has failed….

    It doesn’t take an enquiry to establish this and his benchmark was always going to fail to be met, anyone can do the sums…Even at £50 and hour, the cost would be prohibitive, never mind £100 plus! Therefore he is just making a noise in the hope of gaining some popularity! Pointless comments!!!

  6. If Martin Wheatley is so out of touch with reality that he thinks firms will be targeting the lower wealth quartile of the population, he should leave the FCA immediately. As we in the adviser population have said for years, RDR will disenfranchise the majority of the population from advice on investments and pensions. Genius, just when the demands on the state are rising!

  7. Re. My previous comment…I do acknowledge the interest on the part of Mr Garnier however! Whether or not he could have done something sooner is, I guess, the issue.

    It seems that RDR has to be seen to have failed before it is considered worthy of a review, even if the inevitable is staring anyone who knows this business, in the face!

  8. I am not convinced clients with £50 per month ever got ”good independent financial advice”, but at least they got some.

    My concerns are much deeper and I worry for:

    – all the clients that need to protect themselves and their families through great protection arrangements, as this was always sold and never bought and now there is no one selling

    – all the clients with small pension pots that dont have the confidence to self select, cannot get advice and end up buying an annuity with poor income, shape and without any enhancements

    – all the clients who have bought products through businesses such as banks who have withdrawn from this sector and left them without someone to review their existing planning

    – all the group pension scheme members that used to get great workplace advice on contribution levels, investment approach and consolidation, who can no longer access advice because GPPs commission removal got swept along with the tide at the last minute

    The list goes on and on. Let us hope that Mr Garnier engages with the industry in his review. I am happy to help !

  9. Let’s not get too excited.

    No doubt Martin Wheatley will flick two fingers at the TSC, just like Sir Hector did.

    It’s the entire regulatory system that’s broken. The RDR is just the symptom.

    40 years experience, chartered FELLOW of the Securities Institute FLIA ALIA (dip) no Complaints EVER founding member of NASDIM, and I cannot give advise in the UK,. RDR EFFECT, A FUCKING DISASTER, oh by the way I told MICHAEL FOOT AND JOHN LIVER personally it would be…. But hey more interest in their personal futures by screwing up the IFA MARKET……who suffers IFA’s their Families and Clients…..who Wins over paid regulators, and bent Bankers. Then of course the puppet politicians who allow this crap to happen.

  11. If the review finds that RDR has been to the detriment of the general public, and a complete waste of billions of pounds, will Sir Hector be forced to give up his Knighthood?

  12. I could only base a view on anecdotal conversation with about 20 or so firms, and in response to MG’s question “can the savers who are putting away £50 to £100 a month get access to good independent financial advice” the phrase “cat in hell’s chance”, would apply.

  13. The last thing we need now is another “Review”. What could that bring? More changes? The banks back to flog 6% commission investment bonds again?

    RDR happened. We’re all adapting to it. Time to leave things alone for a few years.

  14. At least Mark has set a level that ensures the review will conclude that RDR has failed. Now to stop sales of term assurance by non level 4 qualified advisers so the public will get proper advice as the banks and estate agents sellers will not qualify in the main.

  15. 30 years in the business and now turning away pension prospects with less than £500pm which probably accounts for 95% of s-employed market. Why? The MATHS!!

    £200pm x 3% initial = £72 earned in 1st year
    Client then suspends contributions (for whatever reasons) in 2nd or 3rd or 4th year or joins new employers scheme or Govt NEST.

    My calculated expenditure (without profit) after initial meetings, factfinds meetings, designing solutions, presenting solutions, and administering paperwork and submitting compliant business = £800 . My loss if client stops in any time in first 10 years = £730 – £250 . No profit ever even if client runs the plan for 25 years. When doid we sign up to be charities?
    Seriously.. the system is broken… entirely broken and advisers and clients are going to have to wait years before somebody in authority finally admits it was all a terrible mistake!! The rich .£50,000+.. well they get richer and the poor… they find solace amongst the wolves….

  16. To be realistic, the RDR is a mixture of good and bad. The problem, as I see it, is that the FSA was allowed to get totally carried away and introduce endless additional compliance requirements. £50 p.m. into an ISA, even with commission, could never profitable other than in the very long term. But at least in former times (yeah, okay, the good old days) before all this excessive compliance was rained down upon us, we could just about afford to take a view on such a proposition and set up a piddly ISA on a sort of light advice basis without the need for in-depth risk profiling, tons of documented research and pages and pages of appendices. Those are the things that have killed off advice for the masses of modest means.

    But, as usual, the FSA refuses even to acknowledge such simple commercial realities because it has no such concerns of its own.

    Clients want to know just three things:-

    1. What’s the proposition?

    2. What’s it going to cost? And

    3. What are the risks?

    Except in the minds of the people at the FSA, it really doesn’t need to be any more complicated than that. But they just won’t listen.

  17. Regular isas should be allowed to be sold on commission and so should regular pensions (as long as theyre maxing company contributions first). For the first time in my life im turning business away every day. Its quite funny because a client rings you up and says they want to invest £100pm or £20,000 with you. They expect to be greeted with open arms then you have to tell them to go away. They ask where they can get advice and i say “I don’t know”.

  18. I have one question for the reading community, its a simple one and one that i hope gets lost of answers, but when answerin, run this mantra through your head first; “did we need RDR to do this?”

    Q. What good has RDR done for the consumer?

  19. Has anyone at the FCA or within government considered asking the consumers what they want and their feelings on being turned away when they want advice on regular savings and pensions?

    Clients look at you with a very confused look when you explain that unless they can write a cheque out – you can’t give them advice on £100 into a their existing pension unless they set another, new one up so they can pay via the product (one client even said “what, like commission?”

  20. RDR is not the real problem. It’s the regulator.

    The FCA’s first priority should be to protect the public from bad advisers, products and practices. The second priority should be making sure the public has access to important areas of financial services such as face to face advice.

    Any changes to the regulations or rules should first be held up against those priorities. If the change negatively affects either of those 2 priorities then it shouldn’t be implemented.

    What we currently have is a regulator who doesn’t understand the industry, doesn’t understand what clients want, doesn’t want to listen to ‘reports from the coal face’ and is stubbonly resolute in it’s opinion that it knows best.

    Any review should be of the practices of the FCA not of the success of RDR

  21. A review cannot happen quickly enough that and a bit of legal action over the legality of RDR and the restriction of trade it undoubtedly is.

    Regardless of whether individuals are making RDR work (it hasnt effected me particularly either) lets look at the bigger picture for once in this godforsaken industry – RDR doesn’t work for the overwelming majority of ordinary clients particularly those that me and many many others have been saying for years want to save regularly those same regular savers that built up the lump sums all the wealth/fee junkies/managers are chasing now !!!

    Lets just hope any review actually has some clout and is carried out by people who REALLy understand the issues !

    BTW, I see old Sheila Nicholl is off to Ernst and Young !!!!!! +**!!

  22. I for one, will never forgive the government for allowing this mess.
    A disgrace, they said they would back the small businessman, they did, right into the corner.

  23. Someone saving £500-£1000 is in no way profitable and could be argued that they do not require advice. They can DIY this amount and TBH a simple cash ISA would be the most obvious option. After 10 years of saving they may want to consider a S/S ISA and could get some advice at this point. Why is there such a fuss about people saving these amounts needing full advice?!?

  24. I agree with Nick Wardle. What is needed, perhaps above ALL else, is not ever more regulatory reviews by or from the FSA but a review of the FSA itself, by an Independent Regulatory Oversight Committee with the unassailable authority to enforce the conclusions of such a review.

  25. I might as well chip in here.

    As an adviser, I can make the new fee based charging structure work for me and my business – by segmenting my client base and looking only at those clients who deliver some profitability to me. I put my business head on and get on with it. Forgetting about what I may have deemed a ‘loss-leader’ in years gone by.

    Gone is the adviser who will take a punt on an appointment, I want to know how much this person has to invest before I’ll consider an appointment. It’s a new world of professionalism remember, I don’t have time to waste a few hours having a coffee with Mr. £100pm and submitting the business compliantly.

    From a clients point of view, I’m either being walked into a different ‘more transparent’ world of charging if I meet the wealth cut off. Or I am being forced into the world of self-select.

    Another option would be to take the FCAs ‘suggestion’ and cash in my investments so that I can avoid trail commission – ahem, apparently the potential taxation issues here are no longer considered regulated advice.

    Clients WANT advice, they want it as simple as it can be made, and if they cannot get it, they will not take it, nor will they suddenly get the urge to do it themselves online or over the phone.

    The gap gets wider.

    Not all of the RDR is terrible – the move to make our industry a more ethical one was a great idea. I’m not sure it has worked towards that intention however.

    What we will be left with, once most of the UK client base is on platform, is an out-and-out price war with clients wanting the same service for the cheapest price possible. Yes some adviser loyalty will remain I’m sure, but believe me when I say that the big players will get even bigger. The local IFA – the guys who encourage savings and protection at base level will struggle even more so.

    But hey – lets wait for it to happen first, and then try and do something different.

    The proactive FCA, don’t make me laugh.

  26. No one at our firm would advise a client saving £50-£500pm since RDR.
    It’s just not profitable.

  27. Im not overly keen on holier than though advisers that just advise on lump sums because without the salesman building up the isas and pensions with regular premiums in a few years there will be no lump sums to charge a fee for.

    Would I drive out on a Friday night for someone that ‘may’ engage my services and pay £200 pm into an isa or pension? No because i dont want to lose money.

    It has made me more businesslike but what that means is more ruthless and having less time for the people that need help.

    Commission is not a dirty word.

    Trust me, in 25 years when people are having to wait till about 70 for the state pension and they have only £20k in nest then there will be a nightmare on our hands.

    Houses will be being sold and downsizing will be the norm but house prices will start tumbling.

    I can see it now.

  28. You know if you go to the docs with an illness he chats to you for 2 minutes before giving you advice on the spot. No report, no pros and cons etc. this is because a doctor is well qualified and trusted.

    When you see a lawyer they tend to write a one page summary because their profession doesn’t demand a 30 page report.

    I say make everyone chartered and then apply the same logic to advisers in that they should be trusted to do the right thing and do a 2 page max note on why they advised what they did but reduce claim culture.

  29. Steve O @10.40 & Anon @12.03


  30. let me be Blunt ! Minimum amount available for investment £50k minimum regular savings £400 a month. if you don’t match our criteria then we can’t see you, sorry its all the fault of the FSA and RDR.. go on dear client have a moan at them not me, i am trying to make a living and feed a family i am no long a ‘free’ advcie service.

  31. Garnier’s timing is set to coincide with the next election. His previous intervention was the same.
    Smoke & mirrors. Lies & deception.
    Garnier could not give a toss. He wants IFAs’ to think he cares. It is all politics, for the party’s benefit.
    Vote UKIP. Vote UKIP. Vote UKIP. Vote UKIP.

  32. There were 210 upheld complaints for the Networks in the first half of 2013.
    What a staggering cost of regulation…….BILLIONS.

  33. There seems to be a sinister force at work within the FSA/FCA that is trying its best to destroy public access to high quality independent advice. Only last week I had to turn down a request from an employer to give advice to it’s employees about their pension fund, as neither they, nor their staff would be willing to pay my firm’s fees. They would however have been willing to pay an extra 0.35% per annum on the pension funds for advice. But that no longer works for my firm, as it is far too little, paid too late for the responsibility and the work done.

  34. RDR has been a disaster creating better qualified crooks who charge top whack,whilst reducing the access of smaller investors to financial advice.

    Put it simply, the banks and their advisers should have been reformed. Not the financial services industry destroyed.

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