AIFA believes that the Financial Services Authority (FSA) has lost sight of the original objectives of the review, which were designed to build trust and confidence in the investment market, and allow more consumers to have their needs and wants addressed. AIFA is challenging the regulator to re-affirm its objectives for the RDR and ensure the proposed reforms will meet them.
AIFA's RDR Manifesto, published today, is the basis on which its full submission is being presented to the regulator later this week. AIFA is urging the IFAs to make their voice heard ahead of the deadline for submissions on Friday 30 October and to submit their own responses to FSA.
Key points in AIFA's RDR manifesto are:
The RDR must lead to more consumers having their financial needs and wants addressed, not fewer
FSA should use the tools at its disposal to reward firms that invest in their business and its people to deliver the RDR outcomes
No good firm should be put out of business by arbitrary dates imposed by the regulator
Qualifications are not the only sign of competence and, like other professions, work based assessment and vocational training must be recognised as being equivalent
FSA needs to re-affirm its RDR objectives, so that they can be held accountable for delivering them
Chris Cummings, Director General of AIFA, said: "The RDR makes sweeping demands on the financial services industry, and the professional advice community in particular. And while we support the drive towards higher standards of professionalism, we are concerned that the current proposals will not meet the original objectives of the reform. There is a danger that the implementation of some of the proposals by the current deadlines will lead to fewer consumers being able to access independent, financial advice - and those who do will have to pay considerably more for it.
"While AIFA was supportive of the original objectives of the RDR, we have yet to see a detailed cost benefit analysis of the reform that stands up to scrutiny. Since the start of the banking crisis, many more people have sought out independent financial advice. IFAs are the most trusted part of retail financial services - and that is why the FSA should be working with us to bring improvement, not risking the future of firms by rushing to impose deadlines that were set before the recession.
"We believe that FSA needs to approach the RDR mindful of the turmoil that has swept through the UK economy and adopt an approach that works with the sector to deliver a better market for consumers. Without a smooth transition, FSA risks driving out good firms, which will increase the cost of advice and reduce access for UK citizens. This would be to the detriment to the regulator, industry and consumers.
"A generation will be robbed of the security that professional, independent financial advice can bring."
