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‘Clarity needed on platforms’: Close Brothers’ RDR plans

Further detail required around the facilitation of fees when interacting with third-party platforms.

By Donia O'Loughlin | Published Jul 27, 2012 | comments

After seven years of prevarication and posturing from all corners of the industry, the Retail Distribution Review is set to come in on the 1 January 2013.

However, financial planning and wealth management business Close Brothers Asset Management, like several others, believes further clarity from the regulator is needed on some areas of the rules and predicts a period of difficult transition in 2013.

David Muncaster, head of intermediary sales at the firm, says his firm’s move to be RDR-ready “is going well”, but points out that their own adaptation process has been intense as the changes will affect the firm “on a number of different levels”.

“We are a provider of investment solutions, a provider of advice and also as a provider of investment solutions through intermediaries and IFAs, so it does impact us on a number of different levels, but actually that is a positive as well.

“It means that we are also reviewing things with our partners - the IFA marketplace - and we are reviewing things from their side of the fence as well as our side.

“We interact with them on a daily basis so we get to share views and thoughts around some of the most difficult areas where perhaps there is not as much clarity as we would all like.”

Clarity is needed on the facilitation of fees with third-party platforms and monitoring whether advice is being given in a pre- or post-RDR context

Fit for purpose

As Close Brothers has a dual role in providing advice and investment solutions, it needs to be 100 per cent confident that the service it is providing for is own clients is “fit for purpose and meets the new requirements”, Mr Muncaster says.

He says he believes the firm is 90 per cent RDR-ready, but highlights there are a “small, few items” where additional clarification is needed from the regulator.

“I think Close has always been a long way down that line anyway in just the way we do business and also in terms of firms that we have acquired within the advice arena.”

According to Mr Muncaster, further clarity is needed in particular around the facilitation of fees when interacting with third-party platforms and the monitoring and responsibility in terms of who is tasked with ensuring that advice is being given in a pre- or post-RDR context.

“There are some ongoing conversations we are having with third party platforms and so forth that we interact on an investment level with about how that is being done and those conversations are helping shaping how we also deal with that with our internal clients on our own platform as well.”

However, while Close is focusing on its own progress, Mr Muncaster says that the nature and scale of the changes requires the firm to also look at the firms it partners with and to assess their readiness for RDR.

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