The Retail Distribution Review

What is the Retail Distribution Review about?

The FSA are today outlining their proposals within Retail Distribution Review.  threesixty Partners are meeting with the FSA to discuss these proposals.

There can be no doubt the Review is a significant regulatory development.  The regulator has challenged some of the fundamental practices adopted by the financial services sector.

The Retail Distribution Review (RDR) covers five key elements:

  • The FSA is questioning the profitability of the advisory sector.  The issue of capital adequacy will be reviewed, and radical change is to be proposed in this regard early in July.
  • The FSA wants to understand how financial advisers can achieve the same status as lawyers and accountants.  To encourage recruitment in the sector, and raise the perception of the public, greater emphasis will be placed on professional qualifications.
  • The FSA is proposing Customer Agreed Remuneration to emphasise that even commission is, effectively, a fee.
  • The FSA will review the feasibility of introducing a “basic advice” process, to assist consumers to gain access to straightforward products, and reduce costs.
  • Regulatory barriers and enablers.  The FSA will consider the position of its own regulatory structures in relation to the market.

You will already have read speculative articles regarding the impact which this review will have on the industry, but it is important to bear in mind that full details are only being released today, and that this is a consultative process.

What will threesixty do to assist clients?

  • threesixty are meeting today with the FSA
  • threesixty will provide a high level summary of the review, together with our immediate views, within the next few days
  • threesixty will undertake a further detailed analysis of the review, and seek consultative input from all of our clients
  • threesixty will present input to the FSA
  • where varied strategies are required threesixty will ensure that our clients are appraised of these, and appropriate solutions delivered, well in advance of the required implementation date

threesixty believes that the Review, whilst prompting change, will present a number of opportunities for our clients.  threesixty’s clients are better positioned than most to deal with the changes anticipated, and we will work closely with you to ensure that you are involved in the consultative process, and benefit from the outcome.