17th July 2011
FT Adviser reports how the FSA "remains committed" to implementing the RDR by January 2013 despite government calls for it to be delayed.
The FSA rejected the Treasury Select Committee's recomendations that the date would be too soon to put into practice the Retail Distribution Review (RDR), a series of regulatory changes which – among other changes – will increase the minimum qualification required by financial advisers.
In a statement released over the weekend the FSA said there was "clear evidence" that moving the date for level 4 qualifications (the new minimum standard) was not needed.
In a statement on its website the Financial Services Authority said: "FSA notes the report's recommendation on timing but remains committed to implementation from January 2013.
"The RDR is already a long-running initiative with the first consultation paper published in June 2007.
The Treasury Select Committee also recommended the FSA relax its ban on grandfathering; this is whereby advisers who started in the industry before qualifications were introduced, but had considered to have a good track record under FSA rules, were allowed to continue trading.
The FSA claimed alternative means – including verbal exams and on-the-job assessments – were available to those who were not able to take further examinations.
By introducing RDR the watchdog aims to draw a line under years of mis-selling scandals and a lack of consumer trust which it said have amounted to a reported £15bn in compensation for mis-sold pension and endowment policies.
Not surprisingly the Association of Independent Financial Advisers (Aifa), a trade body which represents the interests of independent financial advisers, wants the deadline to be delayed.
Stephen Gay, director general of Aifa, claimed a postponement would be in the interests of consumers.
"At the heart of RDR is the end consumer, who needs advice, and the Committee has rightly put the focus back on them."
On The Scotsman wealth manager Brewin Dolphin also claims the present schedule risks confusing consumers as it clashes with another review being conducted in Europe and with the scrapping of the Financial Services Authority.