The final rules for the Retail Distribution Review (RDR) from the Financial Services Authority (FSA) will do little to encourage people to save or protect their finances and will saddle IFAs with high costs, according to the Association of Independent Financial Advisers (AIFA).
The Director General of AIFA, Chris Cummings, said that the original intent of the RDR was far bolder than the announcements contained in the latest paper.
“I see very little in it that will reach out to encourage more people to save more, invest for their future, or better protect themselves in an uncertain world. The reforms are largely focused on parts of the industry that were already in transition. I am extremely concerned about the substantial increase in the estimated costs of the measures proposed in the RDR.
Chris Cummings AIFA DG
He added “The intermediary market could be hit with costs of more than £100m, which will have a major impact on firms. These are difficult trading conditions and the FSA must be mindful about heaping further costs on firms – it is not only these costs but the FSA’s desire to see firms hold more capital and pay higher regulatory fees this year that need to be remembered. FSA has a duty to ensure that the reforms deliver genuine consumer benefit, which was the original objective of the RDR.”
Cummings said that AIFA is working hard to help firms adapt to the changing market and is urging all intermediary firms to review their business model in light of these changes and plan the way ahead.
