RDR snapshot reveals firms have more to do
The RDR came into effect in the new year and made clear how much consumers pay for financial advice, what they pay for and improved professional standards by introducing a minimum level of qualification for all investment advisers.
Undertaken between February and April 2013, the research published today looks at how advisers had implemented some of RDR’s requirements. It found that the majority of firms have made progress and there was a willingness to adapt to the new rules.
Clive Adamson, director of supervision at the FCA, said: “RDR was a major policy development so it’s right that we are acting on behalf of customers to see whether the significant changes are working for them.”
The research for the progress report was undertaken a few months after the implementation of RDR so provides an early snapshot of what has changed.
Adamson said the early “snapshot” revealed that, while firms have acted, they still have more to do to if a customer is going to be in the best possible position to understand the price they will pay and the service they will get for that price.
Common issues highlighted by the report were; the need to provide charges in percentages rather than cash-terms, which customers said they found confusing, firms describing themselves as independent while choosing products from a limited selection of providers and products and not clearly explaining what service customers will receive for on-going fees.
Adamson said:“Firms should carefully consider the feedback covered in this report. We strongly encourage advisers to look at the examples highlighted and take immediate steps to help their customers better understand the charges and services being offered.”
Published at the same time is research commissioned by the FCA which looks at how effective the documents and materials produced by firms are at helping consumers understand the charges they will pay and the service they will receive.
The research reinforces the need for firms to provide clear and concise information if consumers are to understand and be able to compare services and prices.
The FCA is also sending a factsheet to over 6,000 advisory firms to help them assess whether the common issues found apply to them.
The review is the first of three planned over the next year to assess what progress advisory firms are making to meet the new RDR rules.