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Apcims: 'messy' and 'confusing' RDR should allow grandfathering

by Danielle Levy on Nov 23, 2012 at 12:15

Apcims: 'messy' and 'confusing' RDR should allow grandfathering

The Association of Private Client Investment Managers and Stockbrokers (Apcims), disapproves of the FSA's decision to not allow grandfathering for the retail distribution review (RDR) and questions whether adviser charging will bring enough transparency.

Apcims' chief Tim May said that while the trade body supports many of the RDR's aims, such as greater professionalism, it believes there are missed opportunities. He said the lack of grandfathering as part of the regulation will mean that clients lose 'trusted, experienced advisers across the market place'.

May described aspects of the RDR as 'messy and confusing' from the consumer's perspective and expect modification may be necessary later down the line. For example, he questions whether the FSA's proposals to introduce transparent charging for advice really extends to full transparency and asks whether consumers fully understand fund pricing.

May also pointed to potential discrepancies between the RDR and the oncoming Mifid II and the potential for amendments to some of the key points underpinning the RDR.

'MIFID II remains the elephant in the room as there is no equivalent concept of restricted advisers in the text and trail commission is, in the latest parliamentary text, proposed to be disclosed but not necessarily banned for both discretionary portfolios and advice – the exact opposite to RDR. Submissions have been made to protect RDR and the latest Council text bans all trail, but no-one knows where this will end up.'

In a similar vein, the trade body also highlights a growing regulatory burden which its members are facing, and said a 'positive move in the change over to the Financial Conduct Authority (FCA) would be to mirror the successful government initiative of ‘one in one out’ - or even ‘one in two out’ - for regulations'.

3 comments so far. Why not have your say?


Nov 23, 2012 at 14:31

Tim May is 100% right albeit his comments come a bit late in the day. What is really appalling about RDR is that all the people effected by the lack of grand-fathering are in many cases being dictated to by directors, partners, compliance departments, management as well as regulators who are often non-RDR compliant viz-a-viz RDR gapfills and the CISI qualification processes. It's pretty galling for anyone to be monitored and dictated to by others simply because there's perceived to be 'professional' risk to clients who in many cases have been dealing with their contacts for years. No account of record to date has been considered which is great news for the consolidators. it would appear that fair play and full transparency has gone out of the window.

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Anonymous 1 needed this 'off the record'

Nov 23, 2012 at 15:46

While I agree that experienced, competent and knowledgeable investment professionals should have been grandfathered and those falling short of the mark should not be able to ride on the coattails of others - the real point is how one determines whether or not an individual meets the requirements.

As an experienced investment manager, with an old level 3 IMC ( one of many) - I fell foul of the RDR level 4 requirements. Although a significant inconvenience, the only viable option was to undertake the PCIAM examination and additional Gap-fill. I'm glad to report that it was a worthwhile experience, albeit one I do not wish to repeat.

I'm sure many would agree that our professional and associated bodies have not represented the interests of their members terribly well. But to hear belated calls for Grandfathering, when a good number have gone out of their way to meet the requirements, adds insult to injury.

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Pádraig Floyd

Nov 23, 2012 at 23:56

For [insert deity/superior being here]'s sake, there are six weeks until RDR comes in and Apcims are still bitching about grandfathering?

While I agree it would have made sense in a professional environment to 'bank' people's experience – which could have been validated – but surely there are bigger fish to fry?

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