FSA RDR clarifications will go on into 2014, Close
Head of intermediary sales says adviser laggards could fall below required standards, with further guidance likely to be required.
Further guidance will be issued by the regulator in the 12-18 months following Retail Distribution Review implementation as hitherto dormant advisers struggle to get to grips with the standards required under the new rules, according to Close Brothers Asset Management.
In an interview with FTAdviser, to be published later today, David Muncaster, head of intermediary sales at the financial planning and wealth management firm, said that adviser laggards may find they have not fully ‘grasped’ the rules and there will subsequently be a “prolonged period” of clarification.
According to Mr Muncaster, some firms have until recently “rather naively still had their head in the sand”, though he said this has “become less commonplace now”.
He said the “reality is that people thought it would go away”, adding that despite most firms now going “full steam ahead” to comply with the rules there will be issues with these advisers that “won’t just disappear”.
Mr Muncaster predicted that this would force the Financial Services Authority into issuing further guidance on key issues and could take up to 18 months - well into 2014 - to resolve.
He said: “There’s going to be subsequent guidance I am sure and a subsequent knock-on effect where firms perhaps haven’t grasped [RDR rules] as firmly as they should have done or have really not given the due care and consideration to their business and how they will work with clients after the event.
“I think there will be another prolonged 12- to 18-month period while people realise that this doesn’t meet the standard or isn’t in the spirit of things or [they] need to define what they have set out initially here a little more carefully.”
As for his own firm, Mr Muncaster said he had no concerns about the incoming rule changes and he said he generally believed the RDR would be a positive influence on consumers’ sentiment towards and trust in financial services.
He said: “I think unfortunately a lot has been opaque to clients and that has led to clients’ mis-trust and ambiguity about what they are getting from advisers and what they are getting in terms of an overall service.
“I think this [the RDR] will drive people to appreciate the effort and work that goes into providing quality gold-plated financial planning and quality investment propositions. And so I think it will be much clearer.”
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