RDR: A mixed report card

Although a number of IFAs, including its trade association AIFA, spoke glowingly of the key proposals in yesterday's RDR Consultation Paper, not everyone agreed.

The suggested ban on factoring and the blanket application of higher qualifications and adviser charging to simplified advice models were of particular concern.

Prudential UK - Andy Curran, intermediated distribution director

"We remain concerned the proposals are insufficient to broaden access to advice for consumers and, at a time when we need more rather than less advice, the term ‘restricted' may send out a negative and unintended message to consumers. The provider community needs to get behind IFAs at this time to support them through the changes required and at the same time encourage regulators to focus on how to bring new blood into the industry to replace those who choose to exit."

ABI - Maggie Craig, director of life and savings

"The FSA wants those who offer ‘restricted' advice to have the same level of qualifications as those who issue full advice. We have serious concerns this will make it economically unrealistic to offer straightforward and transparent sales for those who want affordable access to simple products. Not least because any adviser who is fully qualified is more likely to be attracted to the higher rewards for giving full advice. "For most consumers looking to make smaller regular savings, a one-off payment for advice could put them off seeking it. It is therefore disappointing this paper has not taken on board our suggestion that providers could agree to provide finance with standard terms to consumers who wish to pay over time, ensuring bias is removed but maintaining consumer access to advice."

Aegon UK - Francis McGee, head of corporate affairs

"The FSA gets a mixed report card. It still needs to do a lot better if we're to meet the original RDR aim of increasing consumer access to advice and products. The proposed ban on factoring and the blanket application of higher qualifications and adviser charging to simplified advice models are particularly disappointing in this respect. They will stifle innovation and make it more difficult for people making modest regular savings to pay for advice. The FSA is now relying very heavily on the existing basic advice model, and since this hasn't worked so far, a full review is urgently required"

Royal London - Gareth Evans, head of corporate affairs

"It is very important adviser charging is required for all firms offering advice, whether they are true independents or restricted in some way. Firms should not be able to hide the costs of their advice services, or pretend that advice comes ‘free'. We also particularly welcome a clear indication the regulator is actively seeking to extend the principles of adviser charging to the group personal pensions market."

Aviva - Stephen Gay, director of distribution change for UK Life

"We are seeking further clarification from the FSA on the role they anticipate product providers will play in the policing of adviser charging. We firmly believe we have a duty of care to ensure fair customer outcomes however we believe that a fundamental principle of adviser charging is that providers do not interfere in advisers' remuneration arrangements with their clients."

Cavendish Online - Ian Williams, managing director

"Even though it may undermine the value of our business, it would be a huge step forward for consumer protection and an improvement in the quality of advice provided in the UK. Our only concern is the probability of adviser firms taking this as a catalyst to increase their pure protection sales because it allows them to retain the unscrupulously high levels of commission that these sales reward them with, often without disclosure."

Financial Services Consumer Panel - Adam Phillips, acting chairman

"It is only by being open with consumers about the cost of advice and any financial relationship between the adviser and the product provider that the industry can hope to improve its credibility. The FSA's plans to introduce clearer payment structures, more realistic descriptions of the different types of adviser and improvements in professional standards give the industry this opportunity."

AXA Life - Steve Folkard, head of pensions and savings policy

"On the definition of independence we are very pleased the FSA has focused on the underlying advice relating to investments rather than purely the wrappers in the packaged product regime. This recognises wrappers will become less important than the investment they carry and the tax benefits they create and provides more flexibility for wealth managers and platform providers in facilitating innovative solutions for independent firms."

Unbiased.co.uk - David Elms, chief executive

"Our numbers show IFAs are already well placed to meet the increased qualifications bar specified in today's RDR report. Over the last few years the IFA industry has seen a drive to professionalism on the back of increasing consumer demand. The almost 16,000 registered individuals on our database now hold between them 14,245 QCF level 4 or above qualifications, clearly highlighting the IFA market has a head start in meeting the new qualifications benchmark within the timescale set."

WHAT DO YOU THINK? See more in next week's Professional Adviser magazine, free to UK financial advisers. To subscribe, email scott.sinclair@incisivemedia.com