Advisers with AMI over RDR

Brokers have backed the Association of Mortgage Intermediaries' (AMI) response to the FSA's Retail Distribution Review (RDR), stating that any 'unintended consequence' of the review could put further pressure on a fragile market.

AMI published its response this month, warning that the RDR could have negative consequences for a market reeling from the widely reported liquidity crisis.

Richard Farr, director of AMI, said the problems in the market could not have been foreseen when the RDR was launched in July. He added: "With the potential for regulatory read-across, we feel now is not the time to focus on the RDR but to make sure business models are strong."

Alan Lakey, partner at Highclere Financial, said the new legislation and procedures seemed reasonable, but agreed there could be unintended consequences. He commented: "The RDR does not mention the mortgage market but clearly at some point in time there will be a feed-through and it will impact on all areas. It will be a difficult year for everyone in the current market and the RDR could further unsettle the sector."

Ashley Clark, ­director of ­NeedAnAdviser.com, said he believed the RDR may present barriers to people who have debt problems approaching mortgage intermediaries. He added: "However, I believe that for the majority of intermediaries involved in the debt management market, they do not give advice for free anyway. It may be seen as an additional burden from a compliance point of view, but the market as a whole has always coped with regulatory change and those that do not will go out of business anyway."

Clark did not agree the RDR would cause any further instability in the market during the current liquidity crisis. He added: "To suggest that the RDR will push us over the precipice is simply scaremongering."