Important information

Retail Distribution Review (RDR)

Retail Distribution Review (RDR)

What is the Retail Distribution Review?

The Retail Distribution Review (RDR) has three main objectives:

  • To clarify the basis upon which firms provide advice to clients.  Firms can offer either “independent” or “restricted” advice.
  • Increase the professional standards of advisers. The FCA considers that it is essential that advisers are highly respected and qualified professionals who adhere to consistent professional standards including a code of ethics.
  • Provide private clients with greater transparency regarding the cost of private banking and investment services.

When did the new RDR rules take effect?

On 1 January 2013

What is the difference between independent and restricted advice?

Anyone describing their advice as ‘independent’ must consider all products and providers that could meet a client's needs and so consider all relevant options, free from any restrictions or bias when making recommendations. A firm offering ‘restricted advice’ will consider either its products and/or the products of a selected range of providers.

How has charging become more transparent?

The cost of advice has been separated from the cost of the product, and the cost of advice is now set out upfront and agreed with the client. 

What are we doing at Kleinwort Hambros?

As most of its peers, Kleinwort Hambros offers ‘restricted advice’, which means that we provide advice on a limited number of companies. However, there is no change to our overall investment approach; for example,  we still access well in excess of 60,000 funds domiciled in the world’s major onshore and offshore centres. Our Fund Solutions centre of expertise has built partnerships with over 140 leading Fund Providers, ranging from large international fund houses, to independent and boutique Managers specialising in niche markets. Our offer is extensive as expected by our varied and sophisticated clientele. This rigorous approach extends to other product providers – for example in structured products, and in life insurance. We have documented procedures in place to ensure that we review the approved panel regularly.

Adviser standards
We pride ourselves in the advice and services we offer you and have, therefore, implemented a policy to ensure that our employees providing investment advice complete a higher qualification level than required by the FCA.  The benchmark qualification for all advisers that provide investment or financial planning advice is set to a minimum of Qualification & Credit Framework (QCF) level 4 by the end of 2012.  As we want our staff to maintain the highest standards, most of our advisers have passed  a level 6 qualification - Private Client Investment Advice and Management (PCIAM) through the Chartered Institute for Securities and Investments which exceeds RDR requirements.

On an annual basis, our qualified advisers are required to obtain a Statement of Professional Standing, which requires them to undergo authorised continual professional development each year,  ensuring that you continue to receive the highest quality of advice.  This is completely aligned to our strategic approach to employee development, and we provide many courses, internal presentations and seminars, along with supporting external training and attendance at events, to allow the advisers to remain at the top level.

We have reviewed and simplified the way in which we charge for our services, enabling you to clearly identify between the cost of advice and other investment fees. Previously, one fee was applied to a given investment, which would include both advice and any fees incurred. Part of this fee  was then paid to the adviser. However, since the implementation of the RDR, you are now able to see how the charges are applied, providing you with a more transparent overview of how we charge you for our advice and services.

The RDR was established with our clients in mind and we are very happy to implement these changes for their benefit, while continuing to provide them with our extensive wealth management services.

Find out more

For further information please visit www.fca.org.uk