THE BIG QUESTION

Should the group pensions community be doing more to get the Retail Distribution Review changed?

Steve Herbert, head of benefits strategy, Jelf
Yes.
We should be lobbying much harder. The problem is that the group pensions community is not doing much about this at all. All the pressure is coming from the IFA community, rather than those in the benefits community.

It is not surprising that employee benefits consultants are not making any noise about it, given that they tend to work on a fee basis.

It is also no surprise that the providers are not trying to change anything. They are glad to see the back of commission, even the ones who have been paying it, because they have been losing money by doing so.

As far as I can see providers are the only people who have lost out through commission. Employees, employers and intermediaries have all done very well out of providers’ ability to pay commission.

But the intermediary community should be making stronger representations about the need to change the Retail Distribution Review before it is too late.

Robin Hames, head of technical, marketing and research, Bluefin
No.
The answer to the question depends on whether you want the RDR changed. While we are not yet sure how some elements of the RDR will work, we understand, accept and endorse many of the principles behind the changes.

What is the alternative other than the RDR allowing the status quo?

It is true that in the private client arena, the RDR will drive the proposition upmarket and there will be less advice for fewer people. That reflects what has already happened in the corporate side.

There is a general recognition that the current model is not sustainable over the long term and that the FSA is not going to change their position anyway.

Is that view defeatist? Is it lazy? There is a feeling that some people are dragging out the opposition to the RDR with the hope that it will never happen rather than trying to change it into something specific.

We have designed our business model to be a post-RDR organisation, and the longer these questions drag on, the less helpful it is. We want certainty, and I am not sure kicking up a fuss is going to change anything.

Alasdair Buchanan, group head of communications, Scottish Life

No. The Treasury Select Committee’s review of the Retail Distribution Review asked for submissions, but required them to be very short indeed.

They were not quite in Twitter territory, but they wanted concise responses that only gave scope to talk about fundamentals rather than focus on specific issues such as the group pensions sector.

For us, while there are some things about the RDR that are not perfect, we support the direction of travel and it would be bad if its core principles were damaged.

We, together with other organisations, are involved in the industry-wide working party that is looking at ways of making consultancy charging work, that is being facilitated by the Society of Pensions Consultants. We have been operating a similar model for some considerable time now.

As to the prospect of having the core principles of the RDR unravelled at this stage, whether as a result of the TSC review or through other means, this would be dangerous. The RDR may need some small changes, but it will improve many of the issues that are currently issues in the market.