The Financial Conduct Authority (FCA) has today launched a Call for Input asking for feedback on its proposed approach to reviewing the Retail Distribution Review (RDR) and the Financial Advice Market Review (FAMR).
The FCA’s review will consider whether these initiatives have been successful in achieving their objectives. The RDR introduced in 2012 the prohibition of commission on pension and investment products and established higher thresholds for adviser communications.
The review will look at what consumers want from the market and how the market works to deliver this. It will also consider how new market trends and developments might affect the future development of advice and guidance services.
FCA executive director of strategy and competition Christopher Woolard says: “Millions of people look for help and support in making financial decisions every year and the aim of the RDR and FAMR was to help the market develop the right advice or guidance services consumers need to make those decisions.
“Consumers and the market are changing rapidly, as technology, employment patterns and inter-generational challenges change the way consumers interact with financial services. As well as looking at how the market has evolved since RDR and FAMR, it’s important that our work looks ahead to see how we ensure that this important sector works well in the future.”
Call for input questions in full
Q1: Is there any other evidence we should consider in our review of the RDR and FAMR outcomes and indicators in Annex 1 and Annex 3?
Q2: How do different groups of consumers access appropriate advice and guidance? Does this vary by financial need or consumer group?
Q3: Are there any barriers to consumers accessing advice or guidance that meets their needs or to firms providing them?
Q4: Do consumers have the right information to compare advice and guidance services and to shop around? How easy is it for them to compare services?
Q5: What barriers exist to making advice or guidance services more affordable?
Q6: Do advice and guidance services offer sufficient quality and choice to meet the needs of different consumer groups? Are any consumer groups underserved?
Q7: Do consumers have confidence and trust in advice and guidance services and do these services address their needs?
Q8: Do consumers who take advice or use guidance services get better outcomes than those who do not? If so, how, and if not, why not?
Q9: What are the key advice and guidance services offered in the market and do they meet the needs of all consumer groups?
Q10: What new business models are being developed and how will they meet consumer needs?
Q11: What aspects of advice and guidance services do consumers value and why? Does it vary by consumer group or financial need?
Q12: What emphasis do consumers place on the cost of advice and guidance, against other elements of value for money?
Q13: Are there any barriers to effective competition between firms offering advice or guidance?
Q14: Are the rules and guidance around advice and guidance working well?
Q15: Are there points where the regulatory system may drive too many people to seek advice?
Q16: Does regulation support the development of advice and guidance services, including automated advice services, that work well for firms and consumers? How can it be improved?
Q17: Did FAMR or the RDR result in unintended consequences that have caused consumer harm
Q18: How have consumer needs for advice and guidance services changed since the RDR and FAMR initiatives were introduced?
Q19: Are there any new or emerging trends (for example, the ageing population and increased pension flexibility) that will lead to further changes in consumer demand for advice and guidance services?
Q20: What changes to the market might be needed to encourage consumer interaction with, and good outcomes from, advice and guidance services in the future?
Q21: What market developments have taken place since the RDR and FAMR reviews? What impact have these had on consumers, the market and competition?
Q22: What future market trends do you expect to see and what do you expect their effects will be?
Q23: What opportunities and barriers are there for developing advice and guidance services in the future?
Q24: What emerging risks to consumers do you see in the market?