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Just like the words from that Abba musical, "Mamma Mia, here I go again", the retail distribution review came around with some new rules and deadlines and asked whether we could get back to the FSA with our comments as soon as possible so that more changes can be forthcoming.

The latest review will be implemented by December 2012 and the FSA wants our responses by October 2009. Therefore another three years to decide how many more versions it can get in. And what happens if a Conservative government decides that it wants to put its stamp on financial services and disband the FSA and set up another organisation and ditch totally the retail distribution review.

My immediate thoughts on Distribution of Retail Investments: Delivering the RDR, are sort of mixed. It is a case of ‘been here before’ and ‘Oh my God what are they doing that for’ to ‘yes that is a good way forward’ to ‘why do they have to make it so complicated when it is really quite simple’.

First, I must say I have vested interests in the retail distribution and what it stands for, unlike most MPs in this country.

The main issues that the FSA said they are trying to consult on are, according to the press release as follows:

• Independent advice is truly independent and reflects investors needs.

• People can clearly identify and understand the service they are offered.

• Commission bias is removed from the system – and recommendations are not influenced by product providers.

• Investors know up front how much advice is going to cost and how they will pay for it.

• All investment advisers will be qualified to a new higher level, regarded as equivalent to the first year of a degree.

When you look at it like that, you must agree that what they are trying to do is right. We should be more qualified as we are dealing with complicated investments and people's taxes and the ever changing pensions legislation. Commission bias should be removed from the system as it gives the industry a bad name and is abused by many firms especially the larger firms and networks who use commission rates as a means of allowing firms on their ‘best advice’ panels. Investors should know up front how much they are being charged and we should be honest enough to say where the money comes from and independent advice should be truly independent.

But as they always say the devil is always in the detail and that means reading the full 165 pages. I hope the FSA workers get access to a final salary scheme for this.

1. A new standard for independence

Here they expect independent advisers to not just offer the whole market, but the whole market and a bit more besides. This means that we should consider structured products and exchange traded funds as well as packaged products. This seems reasonable except that ETFs could be investing in very risky investments such as commodities and the normal adviser may not have enough relevant experience or knowledge of these areas.

The document states that we should be unbiased and not have any contractual obligation to recommend any company but are happy for product providers to still own advisory companies which I find contradictory. Do they really think that providers who own advisory companies do it out of the goodness of their heart or to buy market share?

Moving on to non-independent advice, which will be called restricted advice after a lot of market research. In our vernacular this means tied or multi-tied. Simplified advice and basic advice make up the last two tiers of this system which means there are four levels a client could consider using. It will not make life easier. Why don’t we go back to being independent or tied and get rid of the rest. It was quite simple to understand and the savings ration in the UK was greater then than it is now.

2. Incentives and charging

CAR appears to now be called adviser charges. Charges are agreed at outset with clients who then pay a fee or its paid out of the product and they should reflect the services provided. This seems reasonable in it is what we do at the moment. The FSA said it is up to firms to set their own charges and publish them for the client but they "expect firms to operate their own charging structures responsibly".

Why don’t they just say the maximum fee for a bond, unit trust, Isa or pension is 3 per cent and that will remove all perceived bias. It would not be anti-competitive and all providers would live or die by their own product charges and performance.

Commissions will be banned even if its rebated to the client which will move the industry away from the current smoke and mirrors system where clients feel they get a good deal when they receive 120 per cent allocation and the adviser receives 7 per cent commission.

They are also looking to curtail fund-based fees where there is no ongoing services offered, which seems reasonable and also counter this by saying that you can increase the level of fund based in the future if you offer an enhanced level of service. Again this seems reasonable.

3. Professional Standards for Advisers

Sorry, but no grandfathering. They are still keeping with the QCA Level 4 which is diploma or equivalent. However, they will allow you to take "a rigorous oral version of the written industry examinations (covering the same technical content) aimed at experienced advisers who prefer not to take written exams". That sounds like fun. Personally, I would start the diploma exams as soon as possible as you have until December 2012 before all these new rules come into being.

So, in summary, IFAs are to be more independent, commission will be banned, you have to justify fund based fees, you need to be qualified to Diploma Level or equivalent. All by December 2012.

My advice would be to:

(i) Change your business to a wrap-based model but do not choose just one wrap to use as that could be perceived as bias.

(ii) Get used to restricting your commission or fee to 3 per cent across all products to move away from perceived bias.

(iii) Set up regular reviews for your clients investments and charge a proper amount for that, agreed at outset.

(iv) Start taking those exams as soon as possible to get up to QCA 4 or practice for your oral exam every day for the next three years.

There is always voting for the opposition in next year's election and hoping the new lot changes it again.

Phil J McGovern is a chartered financial planner and director of MPA Financial Management