2012 will to most of us be filled with memories of the Olympics and other great sporting achievements, a feeling of pride that is associated with our ability to really “put on a show”, as we celebrated the Queen’s Jubilee; relief that the Mayan’s were proved wrong and the world did not end and perhaps for some of us, the barrage of really annoying PPI cold calls – in our opinion a really good reason why there needs to be some new rules!
The Retail Distribution Review (RDR) which took effect on 31 December 2012 will have a massive effect on financial compliance and how all UK financial advisors interact with their clients in 2013 and beyond. The RDR is a key component in the Financial Regulators consumer protection strategy.
The RDR focusses on three key principles and this piece sets out how Bridge Investments, in line with our philosophy of total transparency, is looking to go beyond mere compliance:
P1. A clear idea of exactly how much advice will cost
Instead of you paying commission on any new investments we will need to explain to you how much your advice will cost and agree with you how it will be paid for. While we have never hidden the fact we are paid a commission, we want to take a proactive approach to this new regulation by clearly explaining the fees associated with all the options we might discuss with you.
P2. Clarification on the types of investments that an advisor can advise on
From the 31st December we need to clearly explain what we can and can’t advise you on make clear the difference between an “independent” or “restricted” advisor (see FSA guidelines for more details)
Again not something new to our clients (our service page has always clearly shown where we can help) and because we are “independent” we have always advised on all available investments in the categories we focused on (pensions for example). The new regulations however state that to remain “independent”, we have to advise on all investment types, so we have expanded our services to now include Enterprise Investment Schemes and Venture Capital Trusts – part of our commitment to providing our clients with the best and most comprehensive type of advice.
P3. Improved professional standards
Another good thing for the industry, the standards bar has been raised and as with all those Financial Advisors that have embraced the new regulations I have been taking a number of exams recently and take a great deal of pride in the product knowledge of our firm and the excellence we all strive for.
So at Bridge Investments, as we start the New Year, we are well prepared for the new regulations. We hope that you feel we have always demonstrated our transparency and made understanding investments and the work of a financial advisor as simple as possible to understand. We look forward to continuing to demonstrate our commitment to industry best practices.
For more information download the FSA PDF on the new regulations.
From all at Bridge Investments we wish you a very successful and prosperous 2013.
These links may be useful: www.moneyadviceservice.org.uk and www.direct.gov.uk
Twitter users: Martin Lewis of MoneySavingExpert tweets general advice and also answers some personal finance questions- @MartinSLewis and @Moneysavingexpert
The Which? Money team (@WhichMoney) tweet smart money guides.