The Retail Distribution Review (RDR) and the Financial Advice Market Review (FAMR) aimed to improve consumer outcomes from financial advice and guidance. We are reviewing their impact on the market to date, and assessing how the market may develop, to ensure it meets consumer needs now and in the future.
Here we update on our work so far, and set out our next steps.
We published a Call for Input in May 2019, asking for views on the issues that stakeholders thought we should consider as part of our review. We received 57 responses from a range of consumer bodies, trade bodies and firms. We held a series of stakeholder events across the UK to gather further input and feedback. We have also met with several trade bodies, firms and other interested parties.
Some of the main themes that have emerged so far include:
This is a summary and does not reflect all the points raised. We thank stakeholders for taking the time to respond to our Call for Input and engaging with us through our events and meetings to date. We are not commenting at this stage on the various issues raised, but are using the feedback we received to help focus our continuing work.
As the feedback we have received broadly supports the proposed scope we outlined in the Call for Input, we will now proceed with our review in line with that scope. It would not be an efficient use of our resources to focus in this review on areas where there are other FCA projects that are either underway, or have recently been completed in these areas. Our work will be informed by these other projects, but we don’t want to duplicate work in these areas. Therefore, we have decided not to include certain issues in our review, for example:
All the feedback we have received about areas we are not including in our review has been fed into those projects, so that it can be considered as part of that work.
Over the next months we are planning to conduct additional research. This will include information on the industry and consumers.
We will publish further updates on our work later this year, and as it progresses. We expect to publish our final report in 2020.
If you have further information you would like us to take into account, email: [email protected]. Please also use this email address if you would like a meeting to discuss your views on our review.
The RDR was launched by our predecessor, the Financial Services Authority (FSA), in 2006 with most of the rules it introduced taking effect in 2012.
The aim of the RDR was to establish a more resilient, effective and attractive retail investment market that consumers had confidence in and trusted. It made several significant changes to the way investment products are distributed to retail consumers in the UK. The RDR raised the minimum level of adviser qualifications, changed the way charges and services were disclosed to consumers, and banned the use of commission to pay for advice. In 2014, we published the first phase of the post-implementation review of the RDR.
FAMR was launched jointly with HM Treasury in 2015 and built on the work of the RDR. The objective of FAMR was to identify ways to make the UK’s financial advice market work better for consumers. The review had a wide scope and looked across the entire financial services market to assess the accessibility of advice and guidance to help people with their financial decision-making.
FAMR’s final report in 2016 included a series of recommendations for FCA, HM Treasury and other organisations. In June 2017, we published a baseline set of market indicators which serve as a benchmark against which we can track changes in the advice and guidance market over time.
This work will be of interest to: