Following the introduction of the Retail Distribution Review on 31 December 2012, in January 2013 we began a three-cycle thematic review into how firms implemented its requirements.
In the first two cycles we focused on whether firms were complying with our independence and charging and service disclosure requirements.
Cycles one and two found that firms had made progress in implementing the RDR, but identified some areas where they were failing to meet our requirements, particularly around adviser charging disclosure, which was disappointing.
We have now completed the third cycle of this thematic review, which included:
We have published TR14/21 [PDF] which sets out our findings, including some good and poor practice examples of firms’ design and delivery of their ongoing services.
We have also published some independent consumer research, Retail Investment Advice: Assessment of Ongoing Services carried out by NMG Consulting, into consumers’ expectations of ongoing services and their experience of these being delivered. We believe the findings are very instructive for both firms and consumers and we encourage them to review this research.
We requested questionnaires from 110 firms and carried out a desk based review of these, as well as firms’ disclosure documentation. We assessed disclosure compliance using the assessment template we published in June 2014. We undertook a more detailed assessment of the design and delivery of the ongoing services of 12 firms.
We also commissioned NMG Consulting to conduct consumer research into how consumers interact with advisory firms’ ongoing service propositions.
Overall, we believe the findings from this review provide further evidence of the increasing professionalism of the financial advice sector.
We are encouraged by the findings from this third cycle of work, however firms should be aware that we will continue to review their approach in our routine supervisory work.
We will continue to seek further improvements through our ongoing programme of engagement with trade and professional bodies, including highlighting the findings of our consumer research and good and poor practice examples and associated supportive materials.
Since the RDR Thematic Review began in early 2013 we have produced communications and supportive materials based on our findings and engagement with the financial advice sector, to help firms understand and comply with the RDR rules.
We have collated a web page with links to information associated with all three cycles of the RDR Thematic Review, as well as the Post-Implementation Review.
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