RDR Impact.pdf

The Retail Distribution Review (RDR) will change the financial services industry, particularly in how services are distributed to consumers. Key points include:

Payment structures will see less change than expected, with upfront adviser charges and ongoing service fees resembling commission payments.
The assumption that face-to-face advice is the best way to distribute financial services will be shattered, making way for non-advised, direct-to-consumer services.
Digital communications have made direct services more acceptable and available to consumers.
Providers see the intermediary channel as "frighteningly uncontrollable" without commission, while distributors view execution-only direct services as indispensable.
The advice bar is set too high for all but high-net-worth clients, making direct services more appealing.
The market is too complex and jargon-ridden for consumers to navigate, but this is changing with the rise of direct services.
Consumers will benefit from cheaper, more convenient, and more transparent services, similar to the revolution in food retailing where supermarkets replaced traditional grocers.
The financial services direct revolution will happen quickly, with significant and beneficial effects for consumers.