FCA has published the results of the first stage of its thematic review into RDR implementation. It found its sample of 50 firms had made significant progress, but also found areas where some could improve. The review found examples of firms that:
- are not disclosing their charging structure in cash terms, but rather as a percentage fee or based on hourly rates, which consumers may find hard to quantify and makes it difficult for them to compare providers;
- charge by instalments for advice on a single premium product, despite RDR having banned this practice;
- represent themselves as independent but place almost all business with one platform or have a predetermined panel of products and would not practically be able to offer bespoke independent advice to all clients; or
- do not disclose clearly the nature of restrictions on the advice they offer or what ongoing review services involve.
The review includes examples of good and poor practice, and is accompanied by research into how best to help consumers understand charges and services disclosures. The thematic review will continue in October with a wider sample of firms and the possibility of enforcement action against firms that have not acted on the feedback and best practice laid down by this first stage of the review. (Source: TR13/5 – How Firms are Implementing the RDR)