Skip to content
FSA needs to reach the RDR end game

FSA needs to reach the RDR end game

Thank you, FSA!  Another policy statement from the FSA drops on the mat.  And guess what – it’s about the retail distribution review.

The FSA HQ in Canary Wharf must by now be over 80% dedicated to producing these massive tomes.  Like the three-volume-novel so popular in Victorian times, they follow a set formula: discussion paper followed by a consultation paper and finally finishing up with a policy statement.

But there the similarity ends.  For in the final policy paper, the FSA switch modes to soap opera, ensuring that that there is always a cliffhanger in the final part.

Just so, with August’s offering, PS11/9, otherwise known as “Delivering the RDR and other issues for platforms and nominee-related services”.  In this case, the big announcement was that it wished to ban product provider payments to platforms; a big shock after it had been announced in the consultation paper that they would not be doing this.

The effect has been to cause some turmoil on the stock markets with the platform operator Hargreaves Landsdown dropping 9% on the day after the release of PS11/9.

But even worse, rather than actually banning provider payments, the FSA has stated that it wishes in principle to ban it but would not be doing so until it had further consultations the timing of which will be announced later.  So we are all left on the edge of our seats awaiting the final denouement.

Thus the way is paved for another round of discussion paper followed by consultation paper and policy statement.  And there’s nothing in the FSA’s history to give you any confidence that the merry-go-round won’t keep turning.

In the meantime, providers struggle to settle their strategies for the future while IFAs re-tuning their business models have no fixed point from which to start.

The FSA needs to get their act together and bring this process to completion.  It is vital in terms of planning that the FSA make the remaining decisions and reach an end-point, albeit with the knowledge that further fine-tuning of the rules may well be necessary.

A future regulation change, in 2014 say, would be far easier to deal with than the current approach of refusing to be definitive as we race towards the deadline.  Enough of the consultations: let’s make a decision and get on with it.

Tom Murray

Share these Insights

Insurers Going for the Gold

I’m a big fan of the summer Olympics.  And despite some lingering difficulties caused by COVID, it’s great to see…
Read More

NH PFL Carrier Complexity

If you’ve ever trained a puppy, you can likely sympathize with the fact that the first time you own a…
Read More

Why the Embedded Insurance Recipe Will Work

I have curious grandchildren, a trait they definitely inherited from me. Whenever they get a cool new toy or technology…
Read More