Sesame Bankhall offers advisers RDR checklist

With the Retail Distribution Review implementation mere days away, Sesame Bankhall has said the key areas advisers should have focused on in their preparation go beyond qualifications and professionalism to adviser charging, consultancy charging and scope of advice.

Jon Dear, the network and services firm’s marketing and propositions director, says advisers need to ensure that they hold a relevant level four qualification as well as any gap fill requirements, but added that to be fully prepared advisers need to ask themselves a number of questions relating to a broader set of concerns.

Some of these should be focused on ensuring advisers have applied in good time for their statement of professional standing and are aware of strengthened ethics requirements, he said, while others focus on adviser charging, consultancy charging and wider questions on business model.

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The group has put together a checklist outlining these questions, which include:

• Have you applied for your Statement of Professional Standing? You have 60 days from 31 December 2012 in which to receive it.

• Are you able to comply with the amended Statements of Principle for Approved Persons and the code of ethics?

• Do you have processes for recording for each competent adviser at least 35 hours of ‘appropriate’ ongoing CPD [continuing professional development] activity annually, 21 hours of which must be ‘structured’ activities?

• Do you have plans to de-authorise individuals who will undertake activities that do not require authorisation going forward?

• Have you considered the risks and issues with retaining these individuals in non-advising roles?

• Have you designed and tested your firm’s adviser charging proposition and reviewed your existing client service agreements against your new model?

• Do you have processes in place to cease taking / refund adviser charges where you stop providing services to clients?

• Where adviser charges are spread over a number of months, are you aware of when additional Consumer Credit Act requirements apply?

• Have you considered the VAT implications of your charging model? If necessary, you should seek advice from a local tax expert.

• Have you checked providers’ arrangements for facilitating adviser charges?

• Have you considered how your firm will charge for group pensions business going forward and reviewed your existing arrangements and services against your new model?

• Do you have processes in place to cease taking consultancy charges when employees leave the group scheme?

• Have you checked providers’ arrangements for facilitating consultancy charges?

Mr Dear said: “It’s clear that the regulator will place a lot of emphasis on systems and controls and governance within firms. As a result, having good processes in place to mitigate risk is as important as issuing the correct documents.”