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Retail Distribution Review - May 2008 Update
Introduction
After many months of debate in the pinks and at conferences up and down the country, the FSA has given the market a bit of a steer on where the Retail Distribution Review (RDR) may taking us.
The FSA issued an Interim Report (PDF) at the end of April 2008, telling us what they expect the outcome to be. This pre-empts the final RDR paper in October 2008, which should tell us what the final outcome will be. We promised to keep you updated on what was happening in RDR-land so here is our third instalment. This web update will give you our thoughts, what other people are (publicly) saying and, most importantly, what the interim report actually says.
This update is split into 5 sections:
Background
Firstly, a quick history lesson in case you’ve forgotten how we arrived at the Interim Report.
Back in late 2006/07, following Sir Callum McCarthy’s scathing comments on the retail savings market ("produce[s] results which are unattractive to reputable providers, unattractive to their customers, and whose benefit[s] to intermediaries [is] questionable")1, the FSA formed five working parties, which included our Group Chief Executive, Mike Yardley, and Group Product Development Director, Ewan Smith, to look into certain aspects of the current market.
Following on from the reports from these working parties, in June 2007 the FSA issued a discussion paper (PDF). You can read our initial reaction to that in our DP response.
With debate raging on in the financial press for the best part of a year, we gave you an update on where that debate was heading and also a bit more thought on two of the fundamental issues: the structure the market would have in terms of sales and advice and also on advice remuneration. At this point, we set out our 'interim interim' thoughts.
1Sir Callum McCarthy speech at Gleneagles 16/9/06, “Is the present business model bust?”
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The structure of the distribution market
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