FSA feedback statement on Retail Distribution Review
by Gill Montia
The Financial Services Authority (FSA) has published a feedback statement on its Retail Distribution Review (RDR).
The proposals are aimed at giving more confidence to consumers and also set out reforms to the investment market.
They include providing greater clarity for consumers about the advice service being offered by making a distinction between independent advice and sales advice and raising the professional standards of advisers by introducing minimum qualification requirements, for different types of advice.
In addition, the FSA wants to modernise the way advice is paid for by requiring independent advisers to agree the cost of financial advice with customers up-front.
It also wants to develop a new standard for independent advice by ensuring advice is unbiased, unrestricted and extends to all types of investments.
The FSA’s managing director of retail markets, Jon Pain, believes the proposals provide a golden opportunity to regain confidence and trust in the financial services industry at a time when consumers need help more than ever with their financial decisions.
The regulator says it will be consulting on policy proposals for the RDR during the first half of 2009, with the intention that all firms will have implemented the changes by the end of 2012.