The cost of the RDR has drawn criticism from advisers after it was revealed that two reports into its effectiveness have cost approximately £200,000.
Roy Durrant, chartered financial planner for Norfolk-based Almary Green Investments, said: “A move towards professionalism could have been achieved by just raising the minimum qualification requirement, and that would have cost a fraction of the RDR.”
Blair Cann, financial planner for Hertfordshire-based M Thurlow and company, questioned why the regulator had to shell out £200,000 for the effects of RDR, while another adviser, who requested anonymity, said: “There seems to be absolutely no evidence of increased availability of advice and virtually all who are still receiving advice are paying more for it than they were pre-RDR. Not the most successful of outcomes.”
Following a freedom of information request, the regulator revealed it had paid £147,192 including VAT for the 107-page Europe Economics report, Retail Distribution Review: Post Implementation Review, and received a VAT-inclusive £62,998.07 invoice for the 50-page Towers Watson report, Advice Gap Analysis: Report to FCA.
The Europe Economics report found RDR had initiated a move towards professionalism among advisers, while the Towers Watson report found no advice gap resulting from a shortage of advisers.
Right to reply
An FCA spokesman said: “The RDR aimed to create a truly professional financial advice sector; one that provides advice based solely on investors’ best interests. It is still early days but the indications are that the sector has responded positively to the reforms. Importantly, we have seen a reduction in product bias, with a very noticeable decline in the sales of those products that before RDR came with higher commission.”