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Responding to the Retail Distribution Review

Adviser charging: implications of a commission free world

Responding to the Retail Distribution Review


It’s just over a year until the Retail Distribution Review (RDR) takes effect on 1 January 2013. Time is short, and with adviser charging still lacking real definition from the regulator, organisations must consider the numerous implications new charging models could have on the industry and their own strategic direction.

When the RDR rules are in place, product providers (who manufacture products sold in the retail market; fund managers, life insurance companies, and investment banks) will no longer be able to offer commission for advised sales, and advisers (who distribute these products; independent financial advisers (advisers), wealth managers, private banks, and bancassurers), will no longer be able to accept commissions for recommending investment products to UK retail customers.

Key findings

The changes required are already having wide reaching implications. In particular, the need for an adviser charging model, caused by the removal of commission from new retail investment products and new advised sales, is creating a shift in the value chain and market economies.

Irrespective of an organisation’s current position in the value chain, each will have to consider its strategic response and the business implications of adviser charging on operational processes, technology, tax, compliance, finance, and actuarial. We consider these in more detail in the paper.


Download  Adviser charging: implications of a commission free world (PDF)

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