The retail distribution review: Retail financial services; regulation; financial advice market review. Issue 2 (9th May 2016)

• Record Type: Journal Article
• Authors: Ring, Patrick
• Is Part Of: Journal of financial regulation and compliance. Volume 24:Issue 2(2016)
• Page Start: 140
• Page End: 153
• Publication Date: 2016-05-09
• Subjects: Financial regulation -- Financial intermediaries -- Personal financial planning -- Retail distribution review -- Retail financial services; Financial institutions -- Law and legislation -- Periodicals; Banking law -- Periodicals; Financial services industry -- State supervision -- Periodicals; Banks and banking -- State supervision -- Periodicals; Independent regulatory commissions -- Periodicals; 346.082
• DOI: 10.1108/JFRC-08-2015-0044
• Languages: English
• ISSNs: 1358-1988

Abstract

Abstract : Purpose: The purpose of this paper is to review the effect of reforms to the UK's retail advice sector as a result of the Retail Distribution Review (RDR). Design/methodology/approach: The paper takes the form of a review of the RDR in the context of the Financial Advice Market Review (FAMR). Findings: There is a lack of clarity, experienced by both consumers and financial advisers, concerning the nature of "advice". This results from the use of an array of regulatory and non-regulatory terms. Whilst enhancing professionalisation and reducing commission bias, the RDR is failing to address the needs of many financial consumers – identified by many as an "advice gap". It is argued that the focus of the RDR, and previous reforms, on addressing market failures may be misplaced. Practical implications: The paper provides an analysis designed to help in the process of developing a retail advice sector that meets the needs of consumers, in the context policy reforms placing more emphasis on the responsibilities of individuals for financial planning. Social implications: The study has the potential of better outcomes for consumers and reputational returns for the financial services sector. Originality/value: This paper is a review of the current regulatory issues facing financial advisers and retail consumers in the context of the RDR and FAMR.