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RDR not aiming to close gap

The retail distribution review is not designed to address the savings gap despite concerns about poor consumer engagement with the savings market.

FSA chief executive Hector Sants told the Treasury select committee evidence hearing last week: “We hope if the marketplace works better and is trusted more that this will have an influence on the savings gap but we are not specifically targeting savings gap reduction as a measurable and immediate consequence of the RDR.”

He said the RDR has become more “focused and realistic” since former FSA chairman Callum McCarthy gave his famous speech at Gleneagles in 2006, claiming that the distribution model was broken and needed reform.

Sants said: “The McCarthy speech made some more general points about the savings market being broken and set out a more ambitious, holistic agenda of improving the savings market.”

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  1. Surely greater public confidence in and engagement with the industry and, as a result, a closing of the savings gap, should be the cornerstone of just about everything the FSA does? After all, isn’t promoting public confidence in the industry supposed to be the FSA’s very raison d’etre? If not, then what’s the real agenda behind the RDR?

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