RDR paper leaked to Money Marketing

The financial advice industry will be split into independent advice, restricted advice and non-adv­ised sales as part of the retail distribution review.

According to a late draft of the RDR consultation paper, parts of which have been seen by Money Marketing, trail commission will be known as “ongoing charges” and provider factoring will be prohibited.

As revealed in this week’s newspaper, ongoing charges will only be allowed when there is an ongoing service to the client, except for when a client has an investment they make regular contributions to. The paper says that advisers will need to disclose exactly what service customers are paying for.

On factoring, the paper says providers will not be allowed to advance finance to advisers out of their own funds but consumers can arrange flexible ways to pay for advice through regular contributions without provider influence.

Firms will be able to offer independent advice, restricted advice and non-advised sales. Restricted advice will include single and multi-tied, simplified advice and basic advice.

Basic advice will be regulated advice which firms can use to sell stakeholder savings and investment products. It will include a streamlined sales process and pre-scripted questions without a full assessment of needs.

The paper says that adviser charging will apply to group personal pensions but only when potential members are given personal advice on the merits
of joining.

The FSA is considering how adviser charging can apply when a GPP is sold without advice, with one possible option being “arranger charging”.

Syndaxi Chartered Financial Planners managing director Robert Reid says: “Clarity over the labels for the tiers of advice is welcome. It may, however, create a major problem for organisations with more than one channel to market.”

An alternative work-based assessment for advisers who do not want to take exams will also appear in the paper but industry experts warn it will not be
an easy option.

The RDR paper is due to be published on Thursday this week.


Inheritance Tax, a tax on the wealthy? Urban myth or fact?

By Kim Jarvis, Technical Manager with Canada Life’s ican Technical Services Team. Inheritance tax has been around in some form since 1796. Estate duty dates back to 1894 and over the years this tax has evolved into the inheritance tax (IHT) we know and love today, which was introduced in 1986 as a replacement for […]


News and expert analysis straight to your inbox

Sign up


There are 4 comments at the moment, we would love to hear your opinion too.

  1. RDR paper
    The FSA is considering how adviser charging can apply when a GPP is sold without advice, with one possible option being “arranger charging”……SOUNDS LIKE ‘TONTO’ to me!!

  2. Retail Destruction Review
    Does anyone remember that FSA official declaring when asked about the reduction in the number of firms that they “would only start to worry when the number of regulated firms gets down to 6”. At that time I predicted that we would end up with a retail distribution model similar to many on the Continent, only five shades of grey available selling three variations of grey products. What will happen to protection products such as PHI (I am old) or life cover? It is all so phantasmagoric, not all superfragilisticexpialidocious,

  3. RDR
    I do not see why the FSA have to keep interfearing and constantly changing things that work well. All this does is make things unnecessarily more difficult for IFAs, and is of no benefit whatsoever to consumers.

  4. Anonymous too. 24th June 2009 at 5:36 pm

    Anonymous 13.13. Without using swear words I couldn’t have put it better.
    JObs for the boys who have to interfere. Strikes of jealousy to me.

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm

Email: customerservices@moneymarketing.com