Financial advisers are offering investors an increasingly professional service, tailored to their individual needs, according to a press release issued by the Financial Conduct Authority.
It follows the first stage of the post-implementation review of the Retail Distribution Review (RDR), along with thematic work into the disclosure of ongoing services and charges.
In December 2012, new rules (the RDR) were introduced to make the retail investment market work better for consumers.
It was something welcomed by Lifetime. Due to our unswerving commitment to client service, we were all ready for the RDR well before it came into being
These changes raised the minimum level of adviser qualification; removed commission payments to advisers and platforms from product providers; and aimed to improve the transparency of charges and services.
The post-implementation review comes two years after the new rules took force and, says the FCA, provides an early look rather than a definitive picture of their impact.
Europe Economics, which was commissioned by the FCA to undertake the post-implementation review, found that the RDR has reduced product bias. In particular, there has been a decline in the sale of products which had higher commissions pre-RDR and an increase in the sale of those which paid lower or no commission pre-RDR.
Europe Economics also found that:
- an increasing number of financial advisers were gaining further qualifications, demonstrating growing professionalism in the sector.
- the impact of the RDR on price has been mixed. While product and platform costs have broadly fallen, adviser charges appear not to have decreased.
- there is little evidence that the availability of advice has reduced significantly, with advisers still willing and able to take on more clients.
Martin Wheatley, chief executive of the Financial Conduct Authority (FCA), 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.
“These are positive signs but we know there is more to do. For example, early next year we’ll be looking at how we might encourage better disclosure of information to consumers. And, in 2017 we’ll undertake a further review of how the RDR has worked. It is vital that we continue to keep these wide-ranging reforms under review.”