Speaking at an FT Intermediary Forum event in London yesterday, Linda Woodall, the head of investments at the FSA, revealed the results of the latest research carried out by the regulator to assess firms’ RDR readiness.
Out of 3,897 firms that responded to the FSA’s survey, 71% say they are already RDR qualified, with a further 22% studying.
A further 69% of firms say they have developed and begun to implement a plan to be RDR compliant across all the requirements. The same proportion of firms told the FSA they have begun to tell their clients, or have told their clients, about changes under the RDR.
However, the FSA notes that smaller firms are ahead in communicating the RDR changes to clients, with only 36% of larger firms having done so.
The regulator has identified gap fill as a “weaker area” of RDR progress. Although 67% of advisers need to gap fill, to date 39% have completed it while 42% are in the process of doing so and 19% are yet to start. (article continues below)
Woodall says the number of firms who have yet to start implementing an adviser charging model “remains a big concern”.
The FSA’s survey found that 59% of firms are relying on an adviser charging model, but among larger firms the figure drops to 32%.
Woodall says the FSA is stepping up its assessment of firms’ RDR readiness, and says more face-to-face time with firms to review progress will be an “important part” of the regulator’s work this year.
She says: “We are visiting the larger firms whose business models are more complicated, such as banks, building societies, insurers and networks to make sure they will be ready.
“RDR implementation will appear on the agenda for our supervisory meetings, for both small and larger firms, to ensure that the market as a whole is moving together towards practical solutions that will lead to the best overall outcomes.”
Woodall says the FSA has held briefings for larger firms to discuss specific RDR implementation risks, such as life offices being able to provide RDR compliant products, and networks ensuring their appointed representatives meet the RDR requirements.
She says the regulator itself has also been working to communicate the RDR to consumers with a leaflet advisers can give to existing clients and by speaking to consumer groups.