FSA releases RDR consultation paper - PI for IFAs

25/06/2009

Written by Neil Pointon

The Financial Services Authority (FSA) has published a consultation paper on the forthcoming Retail Distribution Review (RDR), it has been revealed.

Released on June 25th, the document - which it has been previously stated will not include a 15-year stop gap on Professional Indemnity (PI) claims - is consulting on the review's moves to ensure advice labelled as being independent is truly impartial.

Furthermore, the RDR will look to ensure that those receiving guidance from independent financial advisers (IFAs) will know up-front how much guidance will cost them.

The consultation procedure also aims to make certain that the recommendations made by advisers are not influenced by product providers.

Jon Pain, managing director of retail markets for the FSA, points out that the RDR will focus on "regaining consumer trust and confidence in the retail investment market, building a more sustainable sector and making it easier for people to find their way around and get the help they need".

He calls for all investment advisers to consider how they will need to adapt to the improvements that the RDR will require them to make when it comes into force in 2012.

Those on the search for PI insurance may, however, be interested to hear claims made by Guildhall Chambers barrister John Virgo that the RDR not enforcing a deadline on PI claims is a breach of the Human Rights Act, as it deprives IFAs of a means of defending themselves.

Click here for more information about Professional Indemnity for IFAs.

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