RegulationNov 26 2014

RDR has been a good thing: FCA

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The RDR is benevolent and has been a success, the chairman of the FCA has told advisers.

John Griffith-Jones, chairman of the FCA, told diners at the Association of Professional Financial Advisers dinner in London that “nobody in the room” could deny that the motives behind RDR were right and good.

He said: “Alongside these changes we have seen an increasingly significant shift towards an industry of increased professionalism.

“This for me is really important because the old FSA always thought about RDR as creating a means for a qualified profession, and we want to support help and encourage that.

“But we mean more than exams – we mean a state of mind, how to conduct yourself and how to conduct your firm.”

Drawing on the experience from the banking sector, which he called a “somewhat painful” learning process, the “tone at the top is no substitute for the tone at the till when it comes to customer expectations.”

Mr Griffith-Jones said that a good culture should permeate through the whole of the firm. This was not about ticking boxes, he said, but “putting professionalism into practice in the all-important interface with the client”.

Although he celebrated the FSA’s firmness in not pushing back the implementation of RDR a year, as had been requested by the Treasury select committee in its review of the RDR in 2011, Mr Griffith-Jones admitted lessons had been learned, and these would be coming out in the post-implementation review conducted by the FCA of how the RDR has affected the market.

Adviser View

One of those attending the dinner was Garry Heath, founder of the IFA Association, the precursor to the Association of Professional Financial Advisers.

Taking the opposite view to Mr Griffith-Jones, Mr Heath said that RDR had proven to be detrimental, with the loss of thousands of advisers from both the independent space and the bank space.

“It has been a disaster, and the statistics from my [Heath Report] review prove this point,” he said.