Retail Distribution Review: 10 months on... and the inducement rules
Following a long consultation and implementation process, the Retail Distribution Review (RDR) came into force on New Year’s Eve 2012. This article looks at the emerging supervisory themes 10 months on.
In CP13/4 Distribution of RIPs: referrals to discretionary investment managers and adviser complaints reporting, the Financial Conduct Authority (FCA) proposed widening the scope of the RDR to capture commission payments to independent financial advisers (IFAs) from discretionary managers for retail client referrals. Currently these payments are only caught when the IFA also provides recommendations on RIPs to the client. The new rules will apply to all retail client referrals by IFAs to discretionary managers, even if the IFA’s relationship with the client consists of non-advisory services such as providing general market research in relation to RIPs or passing on information from the manager. The only activity that would appear to fall outside this scope would be simple client hand-overs where the IFA does not provide the client with any services.
These proposals seem likely to come into effect as they were originally contained in Quarterly Consultation CP 12/27 and only three of 18 respondents disagreed. Advisory firms will need to pause and think about these rules if and when they come into effect, as it is an exception to the general principle that RDR only applies where an adviser is giving a personal recommendation…
If you are registered and logged in to the site, click on the link below to read the rest of the Taylor Wessing briefing. If not, please register or sign in with your details below.
News from Taylor Wessing
News from The Lawyer
Briefings from Taylor Wessing
Insolvency proceedings were opened in respect of the assets of a German resident; the liquidator then sought to set aside a transaction that had been entered into with a resident of Switzerland.
As of 1 October 2012, transfers of majority shares in a private limited liability company in Slovakia have become more complicated.
Analysis from The Lawyer
The city-state is working hard to become a global wealth management hub, and law firms are gearing up for a prosperous new world
Financial disputes are starting to dominate the English courts as the long-awaited fallout from the downturn finally comes to town