The Financial Services Authority refuses to backtrack on the implementation date for the retail distribution review (RDR).
The Financial Services Authority refused to back down this week on the implementation date for the retail distribution review (RDR), despite calls from the Treasury Select Committee to delay a further 12 months from the current date of January 1st 2013.The proposal was rejected by the FSA, whose hasty response had been met with criticism from MPs, prompting Hector Sants, chief executive of the FSA, to apologise for the “clumsy” manner in which the statement had been delivered.
Despite the TSC’s report, the regulator maintains that it intends to proceed with the implementation as planned.
“We have carefully considered the option of delaying the RDR in order to allow advisers more time to qualify” says the parliamentary committee.
The FSA were keen to stress that in a survey conducted during the summer, 91% of retail investment advisers were found to be qualified or expected to qualify by the end of 2012. Furthermore, 89% already held an appropriate qualification or have begun studying for one which has led them to conclude that it is ‘reasonable’ to proceed with the current timetable.
The TSC responded to the FSA’s decision by commenting: “We very much regret that the FSA has not accepted our recommendations that the implementation of the retail distribution review be delayed by 12 months or that non-qualified advisers be able to operate with a system of proper supervision beyond the implementation date.”
“We repeat our concern that the main purpose of the RDR, namely consumer benefit through better choice and competition, will not be served if its introduction leads to a substantial loss of advisers and firms.”
Andrew Tyrie MP, chairman for the TSC, added: “Our exchanges with the FSA about the RDR will inform the approach we take in ensuring high levels of accountability are put in place for the new Financial Conduct Authority.”