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RDR under fire from Tory backbenchers

Backbench MPs expressed deep concerns over the impact of the retail distribution review in a debate in Parliament last week.

The Westminster Hall debate, secured by Conservative MP for West Worcestershire Harriett Baldwin, saw 13 MPs speak in support of constituents’ concerns about the RDR.

Tory MP for High Peak Andrew Bingham said his local IFAs are worried that the RDR will result in fewer people getting access to advice.

He said: “On the subject of commission, the IFAs in High Peak who have spoken to me are concerned that removing the option of commission will prevent people from getting the independent financial advice they need.

“Conversely, it will prevent IFAs from taking the exams because of the downturn in work. That means many people will not get the independent financial advice they will need.”

Conservative MP Charlie Elphicke suggested that the changes would undermine entrepreneurialism.

He said: “Should those tens of thousands of small traders not be encouraged to use their entrepreneurialism to help people save, rather than being squashed by the dead hand of unthinking regulation?”

Treasury select committee member Jesse Norman reiterated his recent comment that the RDR had become a “fiasco”.

The Tory MP for Hereford and South Herefordshire suggested that instead of enforcing QCF level four exams for all advisers, senior accredited members within companies could be authorised to sign off the work of unaccredited staff.

He said: “That allows for the sharing of liability, the preservation of standards within the firm and the guarantee of good quality to the customer.”

Conservative MP for South Swindon Robert Buckland questioned how appropriate the topics covered in the QCF level four qualifications are for many IFAs.

He said: “Asking them questions about international arbitrage and the derivatives market is hardly relevant to the practice they have been carried on for many years.”

Tory MP for Rugby Mark Pawsey claimed that the changes will force experienced advisers out of the industry.

He said: “The regulations will raise the bar in terms of the standard of advisers, which means there will be fewer financial advisers in future and an individual’s ability to seek advice will be restricted.”

Baldwin accepted an offer from Treasury select committee member Mark Garnier to secure a longer debate on the RDR in the House of Commons.

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