Pricing changes carry their own hefty pricetag: Dunstan
Providers are struggling to implement new pricing mechanisms into their systems ahead of a number of regulatory changes, a poll by Dunstan Thomas has found.
The survey of providers found 21 per cent were finding it costly to prepare for auto-enrolment, while another 21 per cent were finding it costly to eliminate commissions and cash rebates and replace them with adviser charging.
The introduction of new pricing mechanisms for advised transactions was noted as the hardest change to make in time for the RDR deadline, by 32 per cent of respondents.
Chris Read, chief executive of Dunstan Thomas, said: “Retirement product providers and fund supermarkets in particular face significant challenges over the next six months to meet new disclosure requirements under RDR.
“The pressure of moving from commission payment to adviser charging has now passed from advisers, who are largely ready, to providers who must implement the systems and illustrations required so that the market can operate in a fully compliant way from January 2013.
“Group scheme providers face the additional challenge of preparing for auto enrolment. All providers must face up to the trend towards factory gate pricing. They will have to design more efficient products and systems to support those products while closing books that cannot live in the more transparent post-RDR world.
“The challenge will be to deliver all this transparency, while preserving wide enough access to independent financial advice and product choice.”
Keith Iles, director of London-based The JHC Partnership, said: “I get the impression that it is a struggle all around. Firms are trying to make these adjustments and survive.”