Retail Distribution Review (RDR)
The implementation of the RDR represented the beginning of a four year programme to fundamentally change (by the end of 2012) the way the UK's market for retail investments is structured and operates.
RDR is a core element of the FSA's strategy to help retail consumers achieve a fair deal.
Huntswood expects the impact of the RDR to be substantial and challenging –
whether firms are a product provider, intermediary, service provider /
outsourcer or have more complex business models with operations
across manufacturing, distribution and servicing of the product
and customer life cycles.
Our insight into the RDR complements our work on
Treating
Customers Fairly (TCF). All RDR
solutions provide opportunities
to ‘hard-wire’ TCF into the operating model of the firm. In this
context Huntswood is focused on addressing three key challenges:
- Operating in a zero commission world
Working with product providers and their partners
to differentiate and deliver improved products and service performance
- Transforming to the sales force for the future
Delivering safe and sustainable advised sales
- Building sales channels for the future – Delivering economically viable simplified advice sales, non-advised sales and non-face to face sales in a safe and sustainable way
Huntswood is well placed to use our impressive industry insight and regulatory and TCF credentials to help firms.
Previous attempts to regulate the structure of the retail investment market over the last 20 years (such as polarisation) have not delivered the expected benefits for consumers and firms alike.
The FSA’s proposals include(1):
- Providing greater clarity for consumers about the advice service being offered, by making a distinction between independent advice and sales advice, and including the connection with the proposed free Money Guidance Service;
- Raising professional standards of all advisers by setting minimum qualifications for different types of advice, and establishing a Professional Standards Board to boost consumers’ confidence in the industry;
- Modernising the way advice is paid for by requiring independent advisers to agree the cost if financial advice with customers up-front, removing the possibility of remuneration bias, and ensuring the cost of all advice is clear to consumers whenever it is given; and
- Introducing a new standard for independent advice by ensuring advice is unbiased, unrestricted and extends to all types of investments.
(1) Extract from the FSA Business Plan 2009/10 – published 12/2/09