The retail distribution review

Patrick Ring

Journal of Financial Regulation and Compliance, 2016, vol. 24, issue 2, 140-153

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.

Keywords: Financial regulation; Financial intermediaries; Personal financial planning; Retail distribution review; Retail financial services (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eme:jfrcpp:v:24:y:2016:i:2:p:140-153

DOI: 10.1108/JFRC-08-2015-0044

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