01 Dec Deloitte RDR Partner Claims RDR Will Drive Down Investment Costs

The retail distribution review will apparently drive down the cost of investment by as many as 50 basis points according to Andrew Power, who is the lead RDR partner at Deloitte. Mr Power claims that the new regulations will create a more transparent investment fees system, that will lead to reduced costs in the long run. He told the Financial Times "The RDR is set to shake up the investment market more than many investment managers are expecting. "The cost of providing retail investment products across the value chain may be squeezed by as much as 50 basis points, as fees become more transparent to end consumers." Mr Power added "Many active fund managers will be threatened by the RDR because advisers and their customers will become more sensitive to fees, particularly if there is no evidence of superior performance. "If these fund managers do not reduce their fees, advisers are likely to switch to low-cost passive funds."