44 | Tees Business
Picture by Martin Walker
T H E EV ER - EVOLVING
L A N D S C A P E OF
FIN A N C I A L PLANNING
EMBRACING
CHANGE
Active Chartered Financial Planners
managing director Karl Pemberton on how
staying abreast of changing regulation is
keeping his firm ahead of the game…
A
-Day, RDR and MiFID II; all
acronyms that will most likely
mean absolutely nothing to
you, but deep down you may
(or should be) benefiting from
the changes that they brought
about.
Pension tax simplification, often simply
referred to as "pension simplification" took
effect from A-Day on April 6, 2006, and was
originally a policy announced way back in 2004
to rationalise the British tax system that applied
to pension schemes.
The aim was to reduce the complicated
patchwork of legislation built-up by successive
administrations which were seen as acting
as a barrier to the public when considering
retirement planning.
The government wanted to encourage
retirement provision by simplifying the previous
eight tax regimes into one single regime for all
individual and occupational pensions.
The Retail Distribution Review, RDR for
short, was a new set of rules that came into
force on December 31, 2012, and was all about
ensuring there was more transparency and
fairness in the investment industry.
RDR rules stipulated that investment
advisers (like ourselves) had to be split into
two clear distinct categories – independent
and restricted. Advisers were also required to
be much higher qualified than they had been
previously, ultimately raising the standards
required like in other professional industries.
This ‘upskilling’ ultimately created a culture
within Active to continuously self-develop,
aiming much higher than ‘just the standard’
set by the regulator, reflecting now in our
Chartered status.
That said, the biggest change was that
financial advisers were no longer able to
receive commissions from fund companies
when they ‘sold’ investment products.
Financial advisers would no longer be getting
that piece of the pie! In short, from January 1,
2013, instead of paying your adviser indirectly
through commissions, you would be agreeing
on the fees for all parties upfront, which is
certainly a more transparent practice.
Active had already worked in this way for
many years previously, so this was music
to our ears. Financial advice firms that had