Retail Distribution Review – January 2013

Retail Distribution Review – January 2013

New regulatory environment

On 31st December 2012, the Financial Services Authority (FSA) is introducing new rules that affect the financial services advice market called the “Retail Distribution Review” (RDR). Its aim is to ensure that customers get good quality advice, products and services suited to their needs, from advisers displaying higher standards of professionalism and expertise.

The key areas that the RDR will focus on are:

  1. Improving the clarity with which firms describe their services, so their customers know whether they are getting advice that is truly independent or whether it is restricted in some way;
  2. Addressing the potential for commission bias to distort consumer outcomes; and
  3. Increasing the professional standards of advisers

We expect that there will be a great deal of media coverage both in the run up to, and immediately after, the implementation of these new rules and therefore we felt it would be useful to explain how CDC Wealth Management is positioned to deal with these changes.

What do these changes mean for you?

  1. Since the company was formed, CDC’s aim has always been to work as a trusted partner to deliver independent financial advice which continually exceeds our customer expectations. We do this by building long term relationships with our customers, truly understanding their needs so we can deliver innovative and tailored made solutions. We reinforce this by ensuring that all communications are clear and transparent.Therefore we do not believe that RDR will materially impact our overall aims in this respect and we will continue to provide independent advice that is tailored to our customers needs.
  2. The new regulations mean financial advisers will no longer be able to receive commissions on any new business conducted from 1st January 2013. The new rules will introduce the concept of Adviser Charging.
    Adviser Charging is a direct method of paying for Financial Advice. Just as with other professional services such as solicitors and accountants, the financial adviser details and agrees with their clients what their fees are for the services they provide. This means the contractual agreement is between the client and the adviser, therefore removing any bias created by the product provider and commissions payable by them.Since the establishment of the firm we have always operated on this type of contractual agreement where we act on your behalf, we have been clear on the cost of advice and the method of payment and have never been influenced by any commission bias that may have previously existed.
  3. We have always felt that CDC advisers should display the highest professional standards in our dealings with customers and the regulator alike.
    The highest standard of accreditation for advisers and financial advice firms is Chartered status. We currently have two members of staff having achieved individual Chartered status whilst all of our client facing staff are qualified at Diploma level or beyond. In addition to which we have committed to following the absolute highest professional standards as a firm and therefore we are in the process of applying for Corporate Chartered status.Whilst qualifications are one aspect of this, we also believe that we should be continually improving our business practices. This means stretching ourselves in terms of our expertise but also seeking new ways to improve our customer experience.

We are also always looking to strengthen our team and have recently recruited two further quality individuals:

Andrew Mann

Andrew joined CDC in August 2012 as Strategic Director and has over 20 years’ experience within the financial sector with a major UK bank. He has considerable expertise in business strategy and specialises in how organisations can become more responsive, using this as a management consultant where he has experience of working with sectors as diverse as healthcare to fashion and retail. Andrew has an MBA from Birmingham City University (BCU) as well as postgraduate qualifications in management and research techniques. He currently lectures and researches at BCU and is just finalising his PhD.

John Sterricks

John joined CDC in September 2012 as a Pensions Manager, having worked in financial services since 1986. He has had held several roles and has expertise in all areas of the Pensions spectrum including Final Salary schemes, Occupational Money Purchase and all types of individual and Group Personal Pension arrangements. An Associate of the Personal Finance Society, John holds the Advanced Diploma in Financial Planning and is currently working towards gaining Fellowship status. He has attained Chartered Financial Planner status.

We have a high quality team, with over 140 years financial services experience between us and as a team we are fully committed to professional and business development to assist our customers in achieving their goals.


Whilst the retail distribution review has undoubtedly offered some challenges to the traditional thinking in the advice market, we fully believe that the key areas of RDR are in the best interests of both customers and firms and therefore our business has been designed with these in mind.

Although the implementation of RDR is some nine weeks away, it is important to communicate this to you as early as possible so that you can be assured that CDC have already positioned the business to ensure we are well placed to deal with the changing landscape. We are fully RDR compliant and therefore envisage that these changes will have no impact on the high quality advice and service we provide to you.

We will of course be providing further general information in due course but will also address this individually with you over the course of our next review meetings.