18 July 2011
AFM responds to report by Treasury Select Committee on the Retail Distribution Review
The Treasury Select Committee (TSC) has concluded in its report that the implementation of the Retail Distribution Review (RDR) should be delayed by 12 months.
In the Association of Financial Mutual’s submission to the TSC in January, we argued that without urgent and significant attention the review could not be “effectively delivered by 31 December 2012”. We have not seen that greater urgency emerge, and as product providers with no shortage of willingness to engage with the Financial Services Authority, we remain very concerned that so much of the detail needed to implement the RDR is still awaited. Meanwhile, it is quite possible that much of the RDR will be superseded within 12 months by new European regulation.
If the Committee wanted corroborating evidence for a delay it should look no further to the announcement on Friday from Cooperative Financial Services that in anticipation of the RDR it is seeking to offload its life business and make 670 advisers redundant. We conclude therefore that the call for a delay is welcome and that FSA should carefully consider whether it is better to implement such seismic changes quickly, or properly.