Consumer Panel work on the Retail Distribution Review

The FSA's Retail Distribution Review (RDR) came into force at the end of 2012. The Consumer Panel was involved in the development of the RDR from the outset and we believe it is one of the most significant developments in financial services regulation since the FSA's inception.

We were keen to see the RDR implemented as we believed it has the potential to deliver significant advantages to consumers, including much fairer and clearer advice. We were concerned to see the Treasury Committee’s July 2011 recommendation of a 12-month delay in RDR implementation.  The Panel had previously submitted evidence to the inquiry, making clear our support.   We reiterated our view that the RDR presents an opportunity for independent financial advisers to raise the perceived value of their advice, improve professional standards within the industry, and deliver a range of services and products that meet consumer needs.

We outlined to the Treasury Committee that our key outcomes for the RDR remain:

• the elimination of bias in the market;

• ensuring the adviser is the true agent of the consumer;

• clarity over the costs of advice; and

• appropriate qualifications for financial advisers.

You can read more about our views on the RDR in our 2010 position paper [PDF]. However, the tone of the debate has changed over time with many MPs recognising the importance of the RDR to consumers.    The Panel has continued to engage with the FSA and other stakeholders during the implementation phase of the RDR.   The Panel responded to the FSA’s consultations CP11/25 and CP11/26 on adviser charging, legacy assets and disclosure. 

 

Platforms

Investment platforms are likely to become an increasingly significant part of the investment market with a future market potential of £1-2 trillion.  The Panel lobbied successfully to ensure platforms conformed to the principles of the RDR. In March 2011 we also published a platforms position paper.  This followed our research on platforms. You can also read our response to CP12/12 

 

Professionalism

We strongly support efforts to increase professional standards across the financial services sector as we believe this will benefit consumers through improvements in the quality of services and products they purchase.  The Panel believes that trust in financial services firms will only be restored once the industry can demonstrate objectively high conduct and knowledge. 

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