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MPs consider RDR review
by Michelle Abrego on Sep 06, 2013 at 08:14
The Treasury Select Committee (TSC) is considering reviewing the impact of the retail distribution review (RDR) due to concerns it has priced out the mass market from advice.
TSC member and Conservative MP for Wyre Forest Mark Garnier (pictured) said he was ‘keen’ to perform a follow-up review, but no decision had yet been made.
He said that in conversations with chairman of the TSC, MP Andrew Tyrie, it was agreed that if the committee decides to go ahead with the inquiry it would not take place before the middle of 2014
‘Any rich or middle class person can go out and get perfectly sound financial advice but at that bottom end you can’t, and I think financial advice needs to be accessible to absolutely everybody,' said Garnier. 'There should not be a means testing and if RDR has put a means-floor on who can get financial advice it’s a very bad thing.’
The lack of financial education combined with the ban on commission is also a concern to Garnier. ‘You almost needed to have that incentive for advisers to go out and find [clients] but if you remove that incentive and say “look, I would like to give you to give me a cheque for £100" the [client] will turn around and say “Well, why do I think I need it?”, which is part of the problem.’
A spokesman for the Treasury Select Committee said: ‘The possibility of conducting further work on the RDR next year has been discussed by the Committee. At present, no such inquiry has been agreed or announced by the Committee.’
According to correspondence with the Financial Services Authority in September 2012, the TSC said it would examine the impact of the commission ban to ensure consumers benefit from the policy change.
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