The Financial Conduct Authority’s review of the Retail Distribution Review implementation revealed that financial advisers simply need to fine-tune their propositions as “surprisingly few” issues were raised, the Association of Professional Financial Advisers has said.
The FCA’s thematic review into the RDR, published today (25 July) identified issues around client charging and adviser representation, specifically with independent advisers that are operating a model that is in reality restricted.
Chris Hannant, director general at Apfa, said: “It is early days, but a lot of progress has been made in a short period with many firms acting in line with the rules.
“However, it is to be expected that in adapting to new ways of charging there will be some teething issues as companies refine the way they operate.
“The review also questions how firms represent themselves with regard to being independent or restricted. Our experience is that companies are very definite about the models they are now operating.
“It is clear, however, that for customers, there is need for improvement and greater clarity around the distinctions. We will be looking closely at the FCA’s research to see how we can help members learn from good practice in this area.”
Apfa also said that the FCA has recognised that the industry has done a “good job” in preparing for and getting to grips with the new regulatory framework.
Mr Hannant said: “It now needs to translate that recognition into tangible benefits. With less supervision of advisers needed, that should translate to lower fees.
“Support from the FCA on this will not only help the sector recover numbers, but also ensure it can look after its clients to the best of its ability.”
The second cycle of the FCA’s review into RDR will focus on enforcement and the results are expected in October.
Mr Hannant said: “We believe there will be marked improvement in these areas by the next review in October. If there is, we question whether a third review will be necessary.”