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RDR & FAMR Review: FCA Calls for Input
FCA Calls for Input on intended RDR & FAMR Review
13th May 2019
This month the FCA has begun Call for Input that asks for feedback on its proposed approach to reviewing the Retail Distribution Review (RDR) and the Financial Advice Market Review (FAMR).
The review the regulator plans to undertake will consider whether the RDR and FAMR initiatives has each been successful against their intended objectives.
Both the Financial Advice Market Review (FAMR) and the Retail Distribution Review (RDR) sought to improve the distribution of retail financial services products.
The RDR was launched in 2006 by the Financial Services Authority (FSA), the predecessor to the FCA with most of the rules taking effect in 2012, whilst the FAMR was launched jointly by the FCA and HM Treasury in 2015 that built upon the work of the RDR.
RDR’s aim was to embed “a more resilient, effective and attractive retail investment market” that consumers would trust and have confidence in. There were several significant changes that were made to the way in which investment products were distributed to retail consumers across the UK, as well as raising the minimum level of qualifications for advisers along with changes to the way charges and services were disclosed to consumers. It also banned the use of commission to pay for financial advice.
Continuing on from the RDR, the main objective of the FAMR in later years was to identify ways to make the UK’s financial advice market work better for consumers, with a final report being published in 2016 that made number of recommendations for both the FCA, HM Treasury as well as other organisations. This was followed up further in 2017 with a baseline set of market indicators published by the FCA to serve as a benchmark against which the regulator could track the changes in the advice and guidance market over time.
The FCA’s intended review of both the RDR and FAMR initiatives will also look at what consumers want from the market and how the market is able to deliver upon this. Given the changes that have taken place in the markets and to consumers over the years since implementation, the review will also look to consider how new market trends and developments might affect the future developments of advice and guidance services.
With initial feedback requested by the 3rd June 2019, those wishing to partake have just under a month in which to do so. Additionally, the regulator will be holding a number of stakeholder events at which it will collect data, as well as further input from consumer research and surveying of sample firms. The final report is expected to be published sometime next year.
A spokesperson for the FCA, Christopher Woolard, the Executive Director of Strategy & Competition said, “Millions of people look for help and support in making financial decisions every year and the aim of the RDR and FAMR was to help the market develop the right advice or guidance service consumers need to make those decisions.” He continued, “Consumers and the market are changing rapidly, as technology, employment patterns and inter-generational challenges change the way consumers interact with financial services. As well as looking at how the market has evolved since RDR and FAMR, it’s important that our work looks ahead to see how we ensure that this important sector works well in the future. We want the market to deliver a range of good quality, affordable advice and guidance services that meet consumer needs.”
To have your say, ensure that your comments and feedback are received at the regulators by the 3rd June 2019.
Read the Call for Input here.
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