Treasury Select Committee and FSA disagree over timing of RDR implementation

Key Committee recommendations:

• A 12 month deferral of the introduction of the RDR

• Retention of the level 4 requirement, but with leeway provided through a system of proper supervision (and the additional year)

• A grandfathering process giving flexibility for advisers on a case-by-case basis

• Further and ongoing work by the regulator, focusing on:

  • explaining to the public the change in labelling of advice as 'restricted' or 'independent'

  • analysing the impact of the removal of trail commission

  • the impact on vertically integrated firm's remuneration structures

  • the merits of any move to a Level 6 requirement

  • progress on a regime for simplified advice

  • pre-implementation churn, post-implementation holding of clients

  • reviewing the impact of the RDR on adviser levels, and savings through independent financial advice

  • scrutinising operations passporting into the UK in areas of activity covered by the RDR

  • how to allow High Net Worth individuals to opt out of the requirements of the RDR

  • the impact of the imposition of VAT on the provision of financial advice

• HM Treasury to confirm whether RDR is consistent with the FCA's proposed objectives

• An inquiry by the Committee as to the accountability of the FCA

• Consideration of the reintroduction of a long-stop on the liability of advisers, if in the interests of consumers