The Retail Distribution Review (RDR) is set to fail miserably according to SCM’s True and Fair Campaign. SCM believes that the actual results of the RDR will go against its original aims, and investors could face paying more in changes than they currently do so.
In a statement, the campaigners noted
“The anticipated effect of transparent charges and fees is that market forces will promote greater competition and push fees down. But even with the new cleaner pricing coming from investment providers we are alarmed that it appears that there is an implicit price cartel among a number of leading fund management companies.”
The campaigners also appeared to draw criticism of execution only fund platforms which are expected to benefit from the RDR as consumers flock to the cheaper ‘execution only’ method of investing:
“The FSA has allowed fund platforms to disguise themselves as offering advice to the public through the back door via ‘recommended funds’ without having to go through the same detailed analysis and paperwork rightly necessary for any IFA or fund manager to ensure any investor recommendation is suitable.”
The FSA has responded to SCM by indicating that they are entitled to their opinion, but prices will be more transparent and consumers will better understand all the associated costs of investing.
