The Retail Distribution Review the Financial Intermediaries Association’s views The Retail Distribution Review the Financial Intermediaries Association’s views FIA’S STANCE FIA’S STANCE RDR: the Financial Intermediaries Association’s views • Value to consumer is at the heart of the intermediary model & entrenched in the FIA Codes of Conduct & Ethics. FIA’S STANCE RDR: the Financial Intermediaries Association’s views • Committed to and support Sound and Fair regulation which: Creates consumer confidence and protection. Improves relationships between all stakeholders. Should encourage fair competition and protect the integrity of the market. Assist in ridding the Industry of improper practices and practitioners. THE FIA’S STANCE RDR: the Financial Intermediaries Association’s views • Remuneration should be: Relative to value added for advice and services Create a competitive leveling of playing fields between different business models. THE FIA’S STANCE RDR: the Financial Intermediaries Association’s views • FIA is guided by the following principles (set out by the World Federation of Insurance Intermediaries): Intermediaries have the right to be remunerated fairly. Market agreements, limiting/imposing means of remuneration are an infringement of basic free market principles. Intermediaries should be allowed to charge fees in addition to commission with agreement of both parties. THE FIA’S STANCE RDR: the Financial Intermediaries Association’s views • Definition of Role players needs to be clearly defined, i.e “advice vs intermediation” /”independent vs. tied advice “. • Continued Engagement and debate with Regulators essential. • Regulators/Insurers do not tar all with the same brush. The Retail Distribution Review the Financial Intermediaries Association’s views CRITICAL SUCCESS FACTORS Critical success factors RDR: the Financial Intermediaries Association’s views • Sustainability of the Intermediated Model – advice, innovation and great service is indispensible. • Adapting of business models to offer efficient and fair delivery. • Enhancing skills and professionalism. Human capital development – life blood. • Intermediaries/Insurers taking accountability for fair play. (TCF) • Not doing away with the principle of free market enterprise The Retail Distribution Review the Financial Intermediaries Association’s views PRO’S AND CON’S PRO’S & CON’S RDR: the Financial Intermediaries Association’s views PRO’S • Improving of quality, understanding and value for money • Improving of quality, understanding of Advice. • Encouraging the adopting of more consumer centric business • models. Encouraging the adopting of • Refinement of product offering to meet needs of consumer and not adviser. • • • and value of advice. more consumer centric business models. Refinement product offering Activity•Based remunerationof model – equivalence of reward. adviser. Structured and Fair remuneration – strengthens the professionalism of theBased intermediary. • Activity remuneration to meet needs of consumer and not model – equivalence of reward. Quote with acknowledgement to Adrian Gore “ Without great financial Structured andplanners Fair remuneration planning,•without great financial and without brilliant financial of theadvice, intermediary. people will fail in their financial affairs” – strengthens the professionalism PRO’S & CON’S RDR: the Financial Intermediaries Association’s views CON’S • Exit of skilled practitioners. • Moving from Advisers to the Direct/tick box models – no advice. • Fear that “prescribed” revenues may kill innovation and full advisory services. • Creation of a further tranche of reporting/controls – increased costs and less focus. • Threat to the common law freedom to contract. (advice/value added fees) Without great financial planning, without great financial planners and without brilliant financial advice, people will fail in their financial affairs ” Quote with acknowledgement to Adrian Gore ” The Retail Distribution Review the Financial Intermediaries Association’s views ADVANTAGES Advantages RDR: the Financial Intermediaries Association’s views • Fair Remuneration for Activities performed and value added. • Those playing outside of the field will have to align to best practice. • Fair and transparent regimen of cost/charge structures. The Retail Distribution Review the Financial Intermediaries Association’s views CHALLENGES Challenges RDR: the Financial Intermediaries Association’s views Designing a model to cater for diverse activities (one size does NOT fit all) Potential threat to consumer where service delivery compromised by prescribed remuneration. Challenges RDR: the Financial Intermediaries Association’s views Challenges RDR: the Financial Intermediaries Association’s views Prevent mass exodus of knowledge and experience. UK experience: ―25% firms exited ( 50% decline in number of advisers) ―50% took tick box compliance –driven approach ―25% capitalized on RDR as an opportunity ―30% increase in direct to consumer platforms Challenges RDR: the Financial Intermediaries Association’s views Do we “understand our customers and our business”? And “how effective are our Business and Financial Models”? Need to do serious introspection?? Balance churn effect – buying of agents with T’s & C’s and upfront payment’s that encourage churn. All of the above, “at what cost versus benefit to the consumer? Whilst RDR will certainly lead to a “professionalisation” of the advice industry, meaning better quality advice, a culling of under-qualified IFA’s and an overall higher level of service, it is clear that it will place an extra onus on firms and the Regulator to provide clarity to consumers over charging structures. - Quote, with acknowledgement to BDO UK: ” ” THANK YOU
© Copyright 2024 ExpyDoc
