Having spent yesterday afternoon at the offices of the Financial Services Authority for a consultation session about the Retail Distribution Review, I have come away less confident about the future.  The RDR is one of those once-in-a-generation opportunities to influence the future to any degree.  The last one in retail financial services was the introduction of polarisation following the Financial Services Act of 1986.  In general, the history of grandiose schemes is not a happy one and it is questionable whether the last twenty years of regulation have delivered much of benefit to anyone.  We have, however, had some disappointing miss-selling scandals.

Most of the positive changes I see have been brought about by application of technology and firms working to meet client expectations.  Of course, it helps that the regulator guides the industry as to its expectations but I meet other practitioners every week who know of some extremely sharp practices where the client is clearly disadvantaged but the right boxes have been ticked and some organisation routinely lie.

My worries about the latest review are that; it is a sledge hammer to crack a nut; it will lead to greater customer confusion; those involved in draughting RDR are so involved that they now run the risk of succumbing to cognitive dissonance and will force it through even if there is no benefit to the consumer.

In general, I support its aims but it is in danger of being superseded by events and may just be a bridge too far for regulation.