Last year there was much anguish and heated correspondence about the proposals in DP07 under the FSA’s RDR. The FSA issued an ‘Update’ [Interim Report] in April 2008 and intend to issue their ‘Feedback Statement’ in October 2008. What the FSA are now saying in response to feedback is that the original proposals should be made much simpler and in theory, clearer for all – especially the consumer. With a clear distinction between ‘Advice’ being provided by IFAs only and ‘Sales’ being strictly non advised, this leaves the current tied and multi-tied distribution models operated by some of the large institutions with some serious thinking to do!
Add in that the FSA still expects CAR with NO Provider influence over remuneration along with the Professional qualifications benchmark and you can see that there are some major implications for all parties – manufacturers, distributors and support services providers in the industry (e.g. technology, compliance and training companies [as well as Professional Institutions]).
Whilst things may change between now and October, there appears to be little outward activity to challenge these proposals, which, with some of these implications has been a little surprising. However, I also wonder how many people really do understand what is being proposed! In various discussions that we have had with providers, distributors and technology suppliers, it would seem that there is a view from some that ‘it won’t happen’ or that it won’t in it’s current structure… some say they ‘don’t know how it would or could work’ whilst others have simply admitted that they haven’t even read the Update!
Whether companies plan to accept and implement the potential changes needed or oppose them, all of those affected need to be aware and understand what is proposed and how they are affected so that they can adapt effectively or oppose effectively.
