Post-implementation review of the Retail Distribution Review

We publish the findings from the first stage of our post-implementation review of the Retail Distribution Review.

The RDR was launched by the Financial Services Authority, the predecessor body of the FCA, in 2006. The rules aimed to make the retail investment market work better for consumers. They raised the minimum level of adviser qualifications, improved the transparency of charges and services and removed commission payments to advisers and platforms from product providers.

While developing the RDR proposals we committed to undertaking a post-implementation review to help us determine the extent to which the RDR was delivering the outcomes it was designed to achieve.

The majority of rules were required to be implemented by the end of 2012. As we are now approaching two years since RDR implementation we have commenced the first phase of the post-implementation review and commissioned external consultants, Europe Economics, to undertake the review so as to ensure its independence.

The first phase of the post-implementation review aims to indicate the extent to which the RDR is on course to deliver its original aims and to flag any immediate issues, rather than definitively evaluate whether or not all of the expected impacts of the RDR have materialised, which will take much longer.

Post-implementation review of the Retail Distribution Review - Phase 1

Retail Distribution Revew: Post Implementation Review - Europe Economics

Who is the review aimed at?

This report will be of interest to:

  • Firms operating in the retail investment market
  • Consumer groups and consumers active in the retail investment market
  • Parties interested in the work of the FCA and its performance and accountability

What are the next steps

  • The next phase of the post-implementation review will be published in 2017 followed by a subsequent third phase of the review which will consider the longer-term implications.
  • In the meantime we will continue to monitor trends throughout the post-implementation review period.
  • We will also take action in the following areas:
    • Consumer understanding of advice offered – We are interested in hearing stakeholders’ ideas for better ways to present information to consumers on the nature of advice services offered and advice charges. This work will form part of the FCA’s wider work on the provision of information to consumers, due for publication in Q1 2015.
    • Innovation in advice models - We are keen to remove unnecessary regulatory obstacles that may stand in the way of innovations in advice models. In January, we will publish guidance in relation to sales that do or do not involve a personal recommendation. We also recently launched Project Innovate, an opportunity for businesses wishing to develop new simplified advice or other innovation which benefits consumers.

How can I find out more?