On 1 May 2019, the FCA issued a call for input on its evaluation of the Retail Distribution Review (RDR) and the Financial Advice Market Review (FAMR).
The RDR took effect in 2012 and made several significant changes to the way investment products were distributed to retail consumers in the UK. The RDR raised the minimum level of adviser qualifications, changed the way charges and services were disclosed to consumers, and banned the use of commission to pay for financial advice.
The FAMR was launched in 2015 and followed up the work of the RDR; the FAMR final report was published in 2016 and contained 28 recommendations for the FCA, HM Treasury and other bodies.
The FCA is conducting its evaluation in light of concerns that, in parts of the market, there may be problems with conflicts of interest, poor treatment of consumers and misleading or confusing communications. The FCA understands that consumers can struggle to assess the cost of advice and may overpay for services which they do not need.
To conduct its evaluation, the FCA has published the outcomes and indicators for both the RDR and FAMR to measure their success (Annex 1 and Annex 3 of the call for input). The FCA plans to assess the RDR and FAMR against these outcomes.
The deadline for responses to the call for input is 3 June 2019. The FCA will conduct further research over the course of 2019 and expects to report its conclusions in 2020. At that stage, the FCA will confirm if it needs to conduct further work or to consult on new rules to improve the quality of advice and guidance services.