RDR delay: three heavyweights on why they are against it

A proposals to delay the RDR by 12 months to give financial advisers more time to meet its rules appeared, initially, to receive a mixed response.

The FSA immediately ruled out a delay, but a number of key stakeholders said they supported the move.

However, three more industry heavyweights have this morning outlined why they believe a delay would be detrimental to consumers.

ABI

"We support the existing timetable for RDR implementation as it will allow customers to have a better experience when they access financial advice," said Margaret Craig, director of life and savings.

"It is imperative for the industry and FSA to not lose sight of the RDR's overall objective which was to make things simpler and more transparent for customers. The ABI does not feel a compelling case has been made for a delay on adviser charging. We hope that the financial adviser community should not need a delay in order to obtain the relevant qualifications.

"We support the Treasury Select Committees recommendations on simplified advice, as the RDR might otherwise reduce access to advice for people who cannot afford full advice. We must all now focus on consumers receiving good quality, affordable advice so the RDR is successful."

Origen

"Whilst we note the Committee's concern that the increased qualification requirement will reduce competition and choice for consumers, we would counter this by noting that those firms and advisers who believe in a professional financial services market embraced the qualification requirement when it first became known," said Mark Pearson, director of business development.

"To suggest that a delay of 12 months will entice more firms and advisers to meet the requirements rather than leave financial services has perhaps missed the core point of professionalism.

"From our discussions in the marketplace we believe that a significant number of advisers set to leave financial services are not full time advisers but are individuals for whom financial advice is actually a second job or who generate relatively low levels of income. If this is the case, this does not represent the loss of activity that some commentators have been predicting. Put simply, if 30% of advisers leave but they represented 10% of client market activity then that 10% can be absorbed within the remaining, and now professional, 70%."

Fidelity International

"A 12 month delay would simply push back the date when the entire industry focuses on the consumer. We strongly support the separation of the cost of advice from the cost of products," said Gary Shaughnessy, UK managing director at Fidelity International.

"As the TSC notes 'the FSA should act wherever possible to remove consumer detriment in financial services as it has in this case.' We support that stance but we recognise this is a fundamental change and it's important to get it right. So we would urge the FSA to clarify the outstanding uncertainties around the rules, including simplifying them where possible and reducing the cost of implementation.

"What is needed is action by the FSA to support the IFA community in reaching the qualification standards and focus on improving outcomes for consumers, rather than have an industry that has, for the last five years since the regulator first announced this review, been focused inwardly on systems changes, new rules and procedures"