The island’s Commerce & Employment Department has launched a consultation on the matter, and has posted a 10-page consultation document on its website, which may be downloaded here.
The consultation is to close on 2 Jan, 2013, the day after the RDR takes effect in the UK.
Separately, the Guernsey Financial Services Commission (GFSC) issued a statement arguing that Guernsey “should not immediately follow the UK” with an RDR scheme of its own, “but instead wait and see what happens in the UK and elsewhere”.
“Following an extensive investigation, we have concluded that there is no immediate need for Guernsey to reproduce the FSA’s proposals," an unidentified GFSC spokesman is quoted as saying, in a statement on the GFSC’s website.
“Instead we are recommending that a cautious approach be adopted to see how the RDR develops in the UK, and how other jurisdictions approach these issues. These will be used in a further reassessment by the Commission in due course, but not too long delayed.
“The Commission will continue to consider any evidence of abusive or harmful sales practices, and whether as a result of RDR any regulatory arbitrage occurs between Guernsey and the UK, which would be undesirable.
"In addition, the Commission recommends that further consideration be given to creating a regime in Guernsey that is much more transparent with regards to commissions for insurance investment products than at present.”
Reasons for consultation
Guernsey said it was embarking on the consultation in order to ensure that the UK RDR’s principles and proposals were fully and properly considered before any decision as to whether Guernsey should adopt a similar regime were to be taken.
In a statement on the States of Guernsey website, the government said comments were being invited from all interested parties on the island, “including stakeholders, financial services businesses, customers, consumers and other users of Guernsey’s financial services industry”.
The statement defines the three key elements of the UK’s RDR regime as consisting of the banning of commission payments to financial advisers, and the implemention in their place of fee-based remuneration; the boosting of minimum educational standards for those carrying out the work of advising clients on their finances; and ensuring that “the way in which firms describe their services to consumers” is more transparent.
As is usual in consultations of this type, Guernsey officials will publicise a summary of the responses once they are in, and use them to decide how and whether to proceed.
If it is concluded that policy changes are required, "then Commerce & Employment will work with the Guernsey Financial Services Commission on how any policy changes may be implemented".
