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RDR consistent with new regulator’s aims

Accountancy firm BDO says the RDR is consistent with the Financial Conduct Authority’s objectives, as long as a simplified advice regime is developed and IFA numbers do not fall significantly.

In its report on the RDR published last month, the Treasury select committee called on the Treasury to confirm it is happy the RDR meets the new regulator’s objectives.

The FCA’s main objective will be to protect and enhance confidence in the financial system. It must also promote competition, secure an appropriate degree of protection for consumers, protect and enhance integrity and promote efficiency and choice in the financial system.

BDO partner and head of financial services Tim Kirk says: “The main thrust of the RDR is entirely consistent with what the FCA would want, although there may be concern over choice and competition if lots of advisers leave the industry, but I do not think it will lead to that.”

Assistant director Alex Ellerton says: “To ensure efficiency and choice you need straightforward, streamlined simplified advice.”

The TSC’s report asks the joint committee on the draft Financial Services Bill to consider an adviser long stop, adding it should be seen to be in the interest of consumers.

TSC chair Andrew Tyrie says: “It should not be introduced to benefit regulators or the industry, only the consumer.”

Ellerton says: “It will be difficult for the committee to agree in favour of automatically removing the right to complain after 15 years.”

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. ‘promote efficiency and choice…’ Yes I can see how RDR might do that. Advisers will become much more efficient at billing and choose their clients rather more carefully. Wonder what the report cost and who pays for it? Still struggling to see how it is legal for IFAs not to benefit from the long stop. The market distortion this creates is that outgoing advisory firms have resorted to all manner of dubious practices to cut off liability when they leave the industry, usually by shifting it onto another party or to the FSCS where of course, we all get to pay for it. The law of unintended consequences is one powerful thing.

  2. Even the TSC has it wrong when it reiterates the FSA mantra that reintroduction of the longstop must be to the benefit of consumers.

    Seeing the longstop as an issue between firms and consumers places it in entirely the wrong category. This is a legal issue concerning the reduction of firms rights and legal protection against stale claims.

    Is the FSA saying that parliament got it wrong when it drafted the Limitation Act? Is it saying that FIMBRA, LAUTRO and the PIA were all wrong in following the law?

    Whilst it is cool to denigrate Parliament and the parliamentary process let’s not forget that the Limitation Act was heavily debated and the 15 year longstop was devised as the most appropriate balance between firms and consumers rights.

    To think that the FSA knows better is akin to believing that Gordon Brown was prudent or that Callum McCarthy was far-seeing.

  3. FSA? FCA? It’ll be the same people in the same offices steamrollering forward the same aggressive, intrusive and, above all else, the same manifestly unbalanced agenda with no regard whatsoever for the provisions of the Statutory Code of Practice for Regulators ~ which, being Statutory, is supposed to be Law. But since when did the FSA have any regard for the Law except when doing so suits its particular purpose. The protection of the 15 year longstop is denied but the Equality Act is conveniently cited as the reason why the FSA refuses to allow grandfathering for older, experienced advisers with clean compliance and complaint records. Double standards if you ask me.

    Meet the new boss ~ the same as the old boss. What’s going to change?

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