The retail distribution review deadline of January 1, 2013 no longer holds significance in terms of removing remuneration bias due to the delays in implementing the FSA’s platform rules, according to Fowler Drew investment director Stuart Fowler.
He says the regulator cannot claim the RDR deadline will remove bias from the market as commission bias and other incentives will still exist until the platform rules are implemented.
The FSA published its platform policy statement earlier this month. It said a ban on payments between fund managers and platforms and a ban on cash rebates was “desirable” but that further research was needed to understand the implications of these changes. Any rules banning payments to platforms will not come into force until after the RDR deadline of January 1, 2013.
Fowler says it is “madness” that RDR issues such as platform rules, legacy commission and simplified advice have yet to be decided.
He says: “It was a really big mistake to leave platforms until the end. I am now feeling that the RDR will have no effect at all.
“If fund managers can continue to make payments to platforms, and can continue to pay cash rebates, then what has changed?”
Thameside Wealth director Tom Kean says: “It is my belief that the RDR will not remove bias. We will simply have fee-charging bias instead, where people charge a fee but no real work is carried out.”