RDR CP: Implementation costs highest for large fee-based firms

Implementation of the retail distribution review changes will cost large fee-based firms more in one-off expenses than equivalent sized commission-based firms.

Cost analysis of the RDR released to day shows it will cost the average fee-based firm with more than ten advisers an estimated £41,000 in one-off expenses on IT, documentation and staff remuneration changes in order to meet the RDR requirements.

This compares to £12,000 for a commission-based firm of the same size.

But it will cost medium sized commission based firms with between four and nine advisers more in one-off expenses than equivalent sized fee-based firms to transition, at £7,500 compared to £6,000.

For small firms with less than four advisers, it will cost fee-based firms £6,000 compared to £3,500 for a commission-based firm of this size.

It will cost large commission-based firms the most in ongoing RDR implementation costs at £11,000 compared to £5,500 for an equivalent sized fee-based firm.

Medium sized fee-based firms will pay £11,000 in ongoing RDR costs compared to £6,000 for medium commission-based firms.

Small fee-based firms will pay £3,500 compared to £3,000 for small commission-based firms.


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