The retail distribution review: retail financial services; regulation; financial advice market review

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    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.
    Original languageEnglish
    Pages (from-to)140-153
    Number of pages14
    JournalJournal of Financial Regulation and Compliance
    Volume24
    Issue number2
    Early online date24 Mar 2016
    DOIs
    Publication statusPublished - 2016

    Fingerprint

    Retail distribution
    Financial services
    Retail
    Financial adviser
    Market failure
    Placing
    Policy reform
    Design methodology
    Professionalization
    Service sector
    Financial planning
    Responsibility

    Keywords

    • financial regulation
    • financial intermediaries
    • personal financial planning
    • retail distribution review
    • retail financial services

    Cite this

    @article{9a136335b8734884bae3d76c99fb4ef3,
    title = "The retail distribution review: retail financial services; regulation; financial advice market review",
    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",
    author = "Patrick Ring",
    note = "acceptance date: 3-1-16 (proof in SAN) online publication date: 24-3-16 AAM as file text is different from published version (emailed author 3-8-16)",
    year = "2016",
    doi = "10.1108/JFRC-08-2015-0044",
    language = "English",
    volume = "24",
    pages = "140--153",
    journal = "Journal of Financial Regulation and Compliance",
    issn = "1358-1988",
    publisher = "Emerald Publishing Limited",
    number = "2",

    }

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    T1 - The retail distribution review: retail financial services; regulation; financial advice market review

    AU - Ring, Patrick

    N1 - acceptance date: 3-1-16 (proof in SAN) online publication date: 24-3-16 AAM as file text is different from published version (emailed author 3-8-16)

    PY - 2016

    Y1 - 2016

    N2 - 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.

    AB - 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.

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    KW - financial intermediaries

    KW - personal financial planning

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    KW - retail financial services

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    ER -