The network said a year long delay would result in between 5% and 10% more advisers making the transition, while also helping spread implementation costs over two years.
Mary-Anne McIntyre, CEO at Openwork, said: “We fully support the TSC’s proposal to extend the RDR deadline.
“Our initial estimate suggested that 20-25% of advisers would leave the industry as a result of RDR.
“We believe a 12-month delay could result in approximately 5-10% of additional advisers making the journey.
“While we fully agree with the general principle that advisers should be suitably qualified to deliver advice, we also support the TSC’s proposal to remove the hard cliff edge, although we appreciate the difficulties inherent in delivering a smoothed approach.”
In addition to greater adviser retention across the industry, Openwork believes a 12-month delay in the implementation of the RDR would have further benefits in terms of managing the costs of the transition.
Mark Duckworth, managing director of distribution and marketing at Openwork, added: “We believe the costs of implementing RDR will add around 15-20% to the cost base of distribution companies and adviser firms in dealing with new processes and procedures in addition to attaining the required diploma level qualification and the loss of client facing time.
“Spreading this load over two years rather than one will be a fantastic help at a very difficult time for advisers.”
Although it believes further analysis is needed on the restricted-advice label, Openwork has welcomed the recommendation that the Financial Services Authority and other bodies devote significant resources to explaining the restricted advice label to consumers.
McIntyre said: “We believe the ‘restricted advice’ label is potentially confusing and may act to the detriment of advisers who choose to operate in this way.
“We therefore support the recommendation that attention is paid to the way in which advice is described and in particular the way in which the term ‘restricted advice’ is used, to ensure that the customer understands clearly the nature of any limitations or restrictions that may apply to the advice being given, and to the product recommendations that may be made as a result of that advice.”
Openwork also said it agreed with the TSC that the ban on commission would be difficult to enforce against vertically integrated firms and welcomes its recommendation that the regulator reports regularly on the impact of the RDR on the remuneration structures of such institutions.
Duckworth said: “We support the principle of customer agreed remuneration and would wish to see all advisers operating on a level playing field in this regard. We therefore support the TSC’s recommendation that vertically integrated firms should not be able to circumvent the principles of the RDR provisions covering customer agreed remuneration and that the FSA should report annually on this particular issue.”
