Clarity is always a good thing and it is particularly important in the management of wealth and the charges applied for IFA’s and their services. But it has been widely acknowledged for the RDR reforms to be successful, the regulator must ensure its new charging rules are implemented effectively for independent and restricted advice. The FSA has been clear that, “for both independent and restricted advice, no payments can be made from provider to adviser relating to product distribution. The only payment an adviser can receive will come from a client-agreed charge.”
Independent Financial advisors like Enable welcome the clarity provided by the new reforms but like many acknowledge the difficulties, even the regulator has acknowledged the difficulties of ensuring its rules are followed by vertically integrated firms and the Treasury select committee has urged the regulator to conduct regular reviews to ensure the RDR is not circumvented.
But the FSA must also keep a close eye on ensuring that tied arrangements between big distributors and providers comply with its new adviser-charging rules. The FSA must give clarity and reassurance about what will and will not be acceptable after the RDR to ensure its reforms are not undermined. It would also be good to hear the regulator’s views on a potential rush to sign long-term distribution deals in the run-up to 2013.
If you want to know more about the RDR reforms and if they have any impact on the management of your wealth, IFA’s of bishop’s Stortford Enable would be happy to talk it through.
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