Holiday reading

The RDR may appear to be creating complexity by the minute, but workable models are also beginning to emerge

Those of you whose Easter holiday reading was the various papers published by the FSA on the Retail Distribution Review will doubtless be looking forward to your summer break with increased keenness.

While the aim of the process is to give greater clarity to how the brave new world will work come 2013, the more one pores over the minutiae of the new regulations, the more complexities seem to arise.

While the aim of the process is to give greater clarity to how the brave new world will work come 2013, the more one pores over the minutiae of the new regulations, the more complexities seem to arise.

GRiD is concerned that group risk products such as group life and group income protection could fall within scope where guidance or advice is given in relation to flex selections. And voluntary benefits could also find themselves drawn in too.

While these product lines will perhaps not find themselves subject to the same sensitivities with regard to deductions from premiums as is the case for pensions, a determination that they are within scope could bring much upheaval, or at least a significant new communication obligation.

What is clear, however, is that all resistance to the idea of Consultancy Charging on pensions is futile. In a brief couple of throwaway lines, last month’s RDR papers consigned concerns over what Consultancy Charging could do to workplace pensions to the bin. It is going to happen and the group pensions sector now has to get on with making it work, waiting until Q3 before it gets more detail as to how.

The positive news is that many firms and providers are already actively engaged in figuring out how to make things work in the new paradigm.

And as this month’s issue’s special report investigates, part of the solution is likely to be corporate wrap. With the RDR pushing individual IFAs ever further away from Mondeo man and woman, the corporate space will increasingly become the space where their needs can be met.

This dynamic, combined with the pluses that come with automatic enrolment and mandatory employer contributions, mean the future is bright for corporate advisers that can get their business model in order.