The Financial Services Authority (FSA) has promised to publish a guide outlining the changes being brought about by the Retail Distribution Review (RDR) which will be enacted in from 1 January 2013.
The FSA has repeatedly stated that in the run up to January 1st 2013 they will be publishing and publicising how the new regulations will affect investors, pensioners and families in the United Kingdom.
Up until now there has been a fair amount of criticism levelled at the FSA as very little has been put in the public domain which will help the British population understand why all these new regulations have been put in place.
However they are adamant that with the help of the Money Advisory Service and other publicly funded consumer organisations that the UK populace will be fully up to speed. The RDR has brought about changes with a view to improve the reputation of the UK financial services institutions, protecting consumers from being miss sold and poorly advised.
Information will include adverts, improving the FSA hand books and publications which are currently out of date, re-invigorating its e-services and teaching its advisers so that they can transmit the reforms to the general public. We wait to see whether or not they truly do bring through the appropriate improvements to the current woeful publications that are available to the general public.
It often is down to the likes of privately run websites which impart the best information, but trying to get a hold of this for the older generation who are not as experienced and adept at using the Internet means that many will not have up to date information.
There continues to be criticism that since the banking crisis of 2007 the Retail Distribution Review has not adapted to the changing world in which we live. Many feel that during the vast majority of all advisers in the 30+ years they would only receive 1-2 complaints, of which it is likely that only one would be upheld.
The accountancy and legal professions would be incredibly proud if they were able to achieve such low levels of complaints. But it is these groups which has motivated the Financial Services Authority to improve the perception of Independent Financial Advisors as a respected professional body. By reducing the ability of IFA’s to make scandalous commissions on some of their work and to make sure that the advice being given by the advisors is clear, appropriate and timely.
However many are concerned that the new regulations coming in to force next year will move many advisors to start putting together a series of model portfolios which they will “top and tail” to fit in with their clients position. This is as a consequence of the concerns that the advisors are placed under an undue amount of regulation and compliance which they must adhere too and would take too long to work through for every client.
Time will tell if the new reforms will prevent individuals having truly tailored advice to their needs.
For more information on RDR and its impacts contact us here.