White paper reviews and analyses key challenges relating to RDR
Outlines how automation helps firms remove human error and centralise revenue, expense and performance data
Bonaire Software Solutions, LLC (Bonaire), a leading provider of software solutions for asset managers and mutual funds, has released a white paper entitled: “The Implications and Potential Opportunities for Retail Distribution Review (RDR).” The paper examines RDR guidelines as issued by the UK’s Financial Services Authority (FSA) and the necessary steps companies, advisors and product providers need to make in order to best prepare for these new guidelines.
“The investment industry is bracing for the impact of regulation and RDR will greatly impact how firms calculate and disclose fees and rebates,” notes Robin Sproull, Director of Programme Management for EMEA at Bonaire and one of the authors of the report. “Fee transparency is a top agenda item for UK investment firms in 2012 as a result of regulatory initiatives such as RDR. Our white paper aims to dissect the issues and provide guidance on how to best prepare.”
The paper states that with regulation putting increased pressure on firms to provide a much higher degree of fee transparency, investment organisations are finding that they need to address new regulatory requirements while managing increasingly complex products, fee and rebate structures. Without strong revenue and expense management discipline, leakage continues to be a prevalent issue as companies are potentially at risk of charging their investors incorrect fees, or over paying distributors, as a result of errant manual processing.
Some of the primary points made in the white paper include:
The evaluation and evolution of RDR: sustainability of the sector, impact of incentives, professionalism and reputation, consumer access to financial products and services, regulatory barriers and enablers
What the main regulatory changes will be: delivery methods and impacts
What RDR means to the market: new routes to market and develop new product propositions, full disclosure and transformation of the retail investment market
Need for comprehensive revenue and expense management: how firms can better spot and analyse strengths and weaknesses in the business by using software that automates manual processes
“Bonaire has witnessed a number of major players in the UK who have already implemented software solutions to address RDR requirements,” states Chris John, CEO of Bonaire. “With the legislation moving toward fulfillment at the end of 2012, asset managers should seek to minimise the uncertainty surrounding RDR by developing a plan for supporting it. By laying the groundwork now, asset managers can put themselves in a position to take advantage of RDR, rather than be overcome by it.”