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FSA must review bank advisers' adherence to RDR rules, say MPs

by Daniel Grote on Jul 18, 2011 at 07:43

MPs have urged the Financial Services Authority (FSA) to scutinise bank advisers' adherence to the retail distribution review's (RDR) adviser charging rules.

It said IFAs submitting to its consultation had raised fears that firms with both provider and distribution arms, like banks, could cross-subsidise advice costs from product manufacturing.

The committee urged the FSA to conduct annual reviews on the impact of RDR on such firms.

'We recommend that the FSA (or its successor the Financial Conduct Authority) report after one year, and then yearly, on the impact of the RDR on vertically integrated firms' remuneration structures, indicating breaches that have been found and what remedies the regulator has asked for,' it said.

'Only with such transparency will the IFA community be persuadable that it has not been unfairly impacted by the implementation of the RDR.'

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1 comment so far. Why not have your say?

Phil Castle

Jul 18, 2011 at 14:45

I suspect that the vast majority of banks will be jumping on the "simplified advice" bandwagon as soon as the wagon has been built. In the meantime advisery firms will be forced out of business just in time for it by the RDR deadline if teh FSA do not head the TSCs reccomndations.

Let's have the "simplified advice rules and platform paper" before the RDr deadline is agreed on and aim for it being 2 years from then. That way a lot of level 3 advisers may stay on t provide "simplified advice" in COMPETITION to the banks and direct sales which will otherwise have a clear field.

This is a competition issue......

The banks can afford to close down their advisory arms (as they are doing at the moment) and then re-open as "simplified advice" providers, but a 60 year old adviser/business who goes, will not return and the consumer should not be loosing that experience and trusted adviser through forced changes, but by fair competition, which this is not.

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