FSA panned for 'limited' RDR concessions

The House of Commons Treasury Committee has expressed its regret that the Financial Services Authority (FSA) declined its suggestion to delay implementation of the Retail Distribution Review (RDR) by 12 months, and described the concessions the regulator had made as "very limited".

The government and FSA today published their response to the committee's recommendations following its inquiry into the impact of the RDR earlier this year.

The committee had called for a one-year delay to RDR implementation as it said the new rules risked "putting large numbers of experienced financial advisers out of business".

However, the regulator has repeated its stance that to delay RDR implementation would be to undermine the good work a large number of individuals and businesses had put in to comply with the requirements by the end-2012 deadline.

The FSA added it had made some concessions to its initial proposals, including to consult on a work-based assessment for some individuals who did not wish to sit an examination.

But the Treasury committee said it was disappointed with the FSA's response.

"The FSA has shown some signs of further thought in its response [to the committee's recommendations].

"However, while we note these initiatives, they are very limited. In particular we very much regret that the FSA has not accepted our recommendations that the implementation of the RDR be delayed by 12 months, or that non-qualified advisers be able to operate with a system of proper supervision beyond the implementation date.

"We repeat our concern that the main purpose of the RDR, namely consumer benefit through better choice and competition, will not be served if its introduction leads to a substantial loss of advisers and firms."