Could do better: professional standards and the RDR

In December, the FSA finally produced its follow-up to CP 09/18, its June consultation on the Retail Distribution Review. That had left open questions about professional standards and had floated whether the ban on product providers setting the terms of remuneration should not be extended to the group personal pension and protection markets. CP 09/31 endeavours to cover these topics. We asked our regular contributor on retail matters, Adam Samuel to take a look.

Adam Samuel BA LLM FCIArb Dip PFS Cert CII(MP & ER) MSI, barrister and compliance consultant can be contacted on +44 (0) 20 7 323 9171; email AdamSamuel@aol.com, website www.adamsamuel.co.uk His book, “Complaints and Compensation: a Guide to the Financial Services Market”, is available from www.cityandfinancial.com and www.adamsamuel.com.

The original June 2006 proposals for a retail distribution review stemmed from a flawed consultation process in which the regulator created panels of the great and the good to discuss its proposals for reforming the industry. The result, unsurprisingly, was a set of unworkable and unfair proposals created by the banking industry for itself. The backlash was so huge that the regulator then did an almost surreal 180% degree turn. This would have prevented anyone remunerated by commission or not offering a whole-of-market service from the using term “adviser”, let alone “independent”. CP 09/18 moderated this considerably, allowing restricted advice to be given by such “mongrel” characters.