Alan Lakey, partner at Highclere Financial Services, said that the discussion paper was full of complex and confused ideas, not least the concept of three types of advisers – professional, primary and general. He stated that the RDR’s intention of allowing more than one type of adviser within a firm so that advisers could have career progression from one level to another hid the fact that a firm could be advertised as whole of market when it was in fact not.
Lakey said: “If you have a firm of 200 primary advisers selling nothing but Barclay products, for example, as long as one person works on an agreed remuneration model, then the whole firm can be advertised as whole of market. That is scary and stupid.”
While the RDR was not intended for the mortgage market, Lakey argued it would definitely be hit with it at some stage.
Samantha Bennett, spokesperson for the Financial Services Authority (FSA), said any worries were premature and unnecessary. “Essentially nothing has been decided with the RDR. This is a discussion paper and the discussion period is open till 31 December 2007. Also, we have been quite clear that there is no read-across to the mortgage market.”
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