The Consulting Consortium highlights key RDR findings
The Consulting Consortium (TCC) has highlighted four key elements from the recently released Retail Distribution Review (RDR) feedback paper.
TCC is urging advisers to be fully aware of relevant RDR requirements, underlining the importance of being alert to what the review means for the industry as a whole as well as the impact it will have on individual businesses.
It has highlighted four key areas in the review.
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Providing greater clarity for consumers. The FSA hopes to provide greater clarity for consumers by improving services and ensuring clients gain a greater understanding of where to go for specific types of investment advice. Money Guidance services will come under greater focus ensuring that advisers fully evaluate the client’s ability to repay debt. This will help ensure advisers undertake an in-depth approach into fulfilling their client’s requirements.
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Raising professional standards of all advisers. Recent events within the financial markets have seen a reduction in consumer confidence. All advisers will be required to reach QCA level four standard which will result in greater levels of knowledge and skills being attained whilst there will be no grandfathering so all advisers will required to meet the standard. By increasing the level of qualification required it is envisaged that this in turn will improve the profile of the industry and mitigate risk.
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Modernising the way advice is paid for. Changes to remuneration are aimed at reducing perceived conflicts of interest therefore reducing the reliance on commission and switch business and moving towards upfront fees paid by the client. In addition this places greater value on advice to the consumer not just in monetary value but also in professional value.
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Introducing a new standard for independent advice. This would give two levels of service. Firstly, that pertaining to independent advice. This means the term ‘independent’ being representative of advice that is unbiased with a greater representation and analysis of the market. Secondly, there is the guided sale which the FSA sees as being for those clients seeking less complex financial advice. It is envisaged that this would fall in between an advised and non-advised sale.
Joanne Smith, Managing Director at The Consulting Consortium, said:
“Clearly the regulatory landscape is changing and there are those that will say it is about time. As with all change there is a certain amount of pain involved whether it is in the form of a change in process or the achievement of the required qualifications.
“The RDR gives the financial community the opportunity to engage with both the regulator and consumer. By improving perception of the industry we will not only increase consumer confidence but ensure there is a solid investment market on which to build.”
For further information please contact:
Joanne Smith, Chief Executive and Creative Officer at The Consulting Consortium; Telephone: 0207 645 8808, Email: jsmith@theconsultingconsortium.com
Notes to editors
Founded in 2000, The Consulting Consortium (TCC) is a regulatory consultancy which provides advice and guidance on activities regulated by the Financial Services Authority and, in particular, the application of the FSA's regime on financial services products.
With offices in London and Yorkshire, The Consulting Consortium's consultants offer innovative, fully FSA compliant and long term solutions to client's individual regulatory scenarios. The Consulting Consortium's sister company, TCC Recruit, specialises in recruiting staff for regulatory compliance, risk and corporate governance positions.
The Consulting Consortium is quality conscious at all times and offers clients a quality of service which is unsurpassed in the regulatory industry.
The consultant database is hand picked and managed by The Consulting Consortium’s own full time resource. This allows The Consulting Consortium to be highly responsive to clients needs whilst offering exceptional service and value for money.
The Consulting Consortium (TCC)
107 Cannon Street
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EC4N 5AF
Telephone: 020 7645 8808