Advisers, not the FSA, should be spreading the RDR word
Education on rules will serve little purpose, but focusing on the finer points of regulation could reap rewards.
So, apparently no one outside of the financial advice sector knows anything about the Retail Distribution Review.
According a survey from Defaqto published this week 80 per cent of advisers believe consumers lack any knowledge of the rule changes coming at the end of this year. Another survey from InvestSmart suggested that as many as 93 per cent of investors have no awareness.
Of course, this is not surprising. While we that operate in and around the financial services sector have obsessed over the arcane detail of the new regulations, this is an axiomatically self-interested pursuit.
The RDR will affect all of us at a material business level, so we greedily consume every piece of information we can, chew it up and spit it back out in the form of debate - in the case of some of the more disgruntled in the industry almost literally so.
In my former life as editor of a private equity publication, the same dynamic was apparent in relation to the European Commission’s Alternative Investment Fund Managers Directive.
You have to question whether the wider public needs to be buffeted with a miasma of information masquerading as ‘education’ about RDR
To listen to the vociferous commentary you would believe that the passing into law of these obscure new rules for fund managers was going to precipitate a cataclysmic sequence of events that would end the world as we know it.
However, to those outside of the sector it was simply another soporific piece of European legislation that was impossibly impenetrable and of little or no relevance to their everyday lives.
I do not mean to make light of the travails individuals may be having in their efforts to comply with the RDR rules, nor to dismiss any of the multifarious objections against them. I am simply suggesting that it is both reasonable and inevitable that those outside of financial services have not taken note.
So who is responsible for forcing them to engage with the changes? In responses to the aforementioned Defaqto study, the vast majority of advisers suggested that it is the regulator’s responsibility to educate the public.
In one sense this is fair enough - it was their bright idea after all. But in truth this would serve little purpose. Who outside of financial services even knows the FSA, or would recognise the initialism as relating to the Financial Services Authority rather than the Food Standards Agency?
Moreover, you have to question whether the wider public needs to be buffeted with a miasma of information masquerading as ‘education’ about RDR. Those that have an adviser will have to be told about the changes by their own intermediary, for clients that do not use a financial adviser it is something that will not change their lives.