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Sting in the retail perspective

To say that this is a significant year for IFA firms would be something of an understatement. We all have less than a year to ensure our overall RDR readiness and, therefore, while some might see this as the end finally in sight, others will be concerned that time is running out to ensure all preparations are complete.

It is to be hoped that most firms are motoring towards what is both a finishing line and a starting point. One key area that continues to require much attention is that of the systems and controls (SYSC) a firm has in place. The RDR brings with it a number of new and additional demands for SYSC that firms are going to have to meet, not least of which are the requirements for those who opt for “independent” status.

Demonstrating that all advisers are unbiased and unrestricted when it comes to retail investment products (RIP) will be a significant task.

Firms will clearly need robust systems and controls in place in order to show that all its advisers are competent to advise on all RIP areas and this needs to be dealt with on an ongoing basis.

The nature of ongoing delivery of advice to clients is a crucial one post-RDR. As we all know, it will not be possible for an IFA to levy ongoing charges unless a tangible and coherent ongoing service is being provided. In itself, this means a further two SYSC requirements – first, that the evidence firms will need to have to demon-strate an ongoing service is being provided to the client and, second, how the firm is auditing the delivery of such a service.

This sounds more complicated than it is, however. As always, the important aspect of all this is the collation of such evidence. The regulator is not going to be happy with a broad-brush approach and instead will want to see specific, written evidence. Providing proof of an ongoing service is going to be critical for firms and as one of the central tenets of the RDR, it will be no surprise to see the regulator move quickly in this area post-2013.

These are just some of the additional SYSC responsibilities that require preparation. The clock is certainly ticking and the deadline date will not change, which will mean a considerable resource and investment burden on top of the normal day-to-day running of the firm. My advice is to plan and prepare a deliverable strategy and simply tick off the tasks that have been completed.

This will allow the firm to see how far down the road they are and what needs to be achieved. Without such a document, meeting all the responsibilities can seem like a daunting and unachievable task.

Julie Hepworth, Group regulatory manager, Perspective Financial Group


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