Nearly new regulatory regime 2013

We are now entering the eighth month of the inception of the Retail Distribution Review ( or RDR for short) process implemented at the very start of 2013.

As noted on our websites front page, Chapters Financial Limited moved to a transparent  fee based client agreed remuneration policy in 2007 (May). Because of this inspired change, we have found the regime transition less complicated than many of our competitors and are proud to have retained our independent status. This may be a reflection of the significant fall in the numbers of advisers in the UK (with numbers still falling) over the last year. (Source: www.imas.uk.com website). Personally, I am saddened by this reduction in numbers, because the access to financial advice that many enjoyed in the past has fallen away, with the anticipation that the Internet will fill the void left by the loss of these services. (See www.advicemadesimple.com as one example).

As a reminder, the headlines of the FSA's planned customer/ client outcomes for the RDR were:

• Advisers qualified to a high standard (Qualification 4 or above).
• Transparent fee based charging structure for both initial and on-going services ( a ban on commission for most services). 
• Choice to use an Independent (IFA) or Restricted financial advice service
• As an additional note, in April 2013, the Financial Services Authority was replaced by a new financial regulator, the Financial Conduct Authority (FCA).

What have been some of the initial effects of these changes we have witnessed?

Many retail financial advisory providers have struggled to comply with these new requirements and this has added to the numbers exiting the profession. It has also been interesting and concerning to note how many existing policy providers (namely some of the big insurance based companies) have been unable to meet the changes required for transparency, confirming that in some cases existing plans cannot accept additional or changed contributions.

Chapters Financial has seen an increase in focussed enquiries in 2013, ranging from pre-retirement, retirement and inheritance tax planning to many SME owner/ director/ managers now getting closer to their company’s  Auto-Enrolment date. It will be interesting to see how the legislation introduced for Workplace Pensions will affect retirement savings in generations to come.

More evidence of the benefits of this regime change will come in future times. It will be interesting to see in time if all the changes have been a success for those seeking financial planning advice.

No individual advice has been provided in this blog and you should seek financial advice (IFA) for your own individual or company’s needs and requirements. Speak to the team at Chapters Financial Limited on 01483 578800

Keith Churchouse FPFS
Director
Chartered Financial Planner

ISO22222 Certified Financial Planner

Chapters Financial Limited

Chapters Financial Limited is authorised and regulated by the Financial Conduct Authority, number 402899.

Do you know that the provision of financial advice is changing soon??

The Financial Services Authority's (FSA) Retail Distribution Review (or RDR for Short) has been many months and years in the planning and will be implemented at the very end of 2012. 

Consumers need to be aware that these regulation changes and their effects on the delivery of UK retail financial services to the public will be significant. The FSA has started a process of raising the profile of the changes and we have also started to see the press joining in the process. I have no doubt that there will be much page space allocated to the topic over the autumn and winter months of 2012. It is important that those seeking financial advice know what these changes mean for them and the choices they will be provided into the future. 

The FSA has produced a consumer information document as a guide to the changes and to start the process of educating those seeking financial advice of what to expect in the future. This can be found at the following web-link here:  http://www.fsa.gov.uk/static/pubs/consumer_info/rdr-consumer-guide.pdf

Previously, I have noted these changes in my Blog in April 2012. Entitled 'All change in the delivery of UK financial services' further information can be found at the following Chapters Financial Blog-link: http://www.chaptersfinancial.com/30042012.php

The main headlines of these changes are:

• Two main definitions of financial advice provision. An adviser will either be independent or restricted.
• Financial Advice will be charged for on a fee basis bringing to an end the use of commission.
• A higher level of industry qualification (Level 4 as it is known) will be required from advisers and they will need a Statement of Professional Standing Certificate to provide financial advice.

At Chapters Financial, we have been successfully offering a fee-based model for over 5 years now and plan to continue to offer high quality independent financial advice into the future for both our existing clients and our new enquirers. For information, Keith Churchouse achieved Level 6 qualification in December 2007.

Because each consumer is different, as is their financial planning needs, no individual device has been provided in this Blog. 

Keith G Churchouse, Chartered Financial Planner

Director, Chapters Financial Limited

Chapters Financial Limited is Authorised and Regulated by the Financial Services Authority. Number 402899

Chapters Financial Limited is not responsible for the content of external webpages