Deloitte comments on the TSC's recommendations to delay RDR by 12 months
18 July 2011
Commenting on the Treasury Select Committee's recommendations to delay the implementation of the Retail Distribution Review (RDR) by 12 months, Andrew Power, RDR Lead Partner at Deloitte, the business advisory firm, says:
"There has been much talk about regulatory delay in the insurance sector. Such delays are only helpful if they allow genuine concerns to be addressed that have not been tackled adequately due to lack of time. In the case of RDR, this might be true around some of the systems issues arising from implementing adviser charging or arising from the soon to be published edition of the platform paper. However, delays that merely serve to elongate well worn arguments already debated just make planning difficult due to the uncertainty, and increase implementation costs as the regulatory projects have to run for longer.
"Considering certain segments of clients outside the scope of the RDR certainly has some merit, as the main thrust of the RDR has been to solve perceived problems and the regain trust of consumers within the mainstream IFA market. Advisers and institutions operating at the upper end of the market, which typically involves international clients and international operations, would face additional costs in having to run an RDR compliant regime for part of its business alongside a large part of its business that is not subject to RDR rules. As with any carve outs, it would be important that they are not used to circumvent the spirit of RDR.
"Most other points were to be expected and have been raised before. As a representative body, the MPs are reflecting the views of their constituents - or at least the views of those most likely to be affected. None of the recommendations fundamentally change the impact of RDR especially in the mass market and mass affluent segments of the market."
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