The Treasury Select Committee (TSC) has called for a 12 month delay to the RDR to enable more advisers to reach Level 4, among a series of other concessions, but the FSA has flatly refused any negotiation on a change to its plans.
In the TSC's report on the RDR out today, MPs said pushing the implementation of the RDR back to 1 January 2014 could increase the number of firms and advisers making the transition to the new system, and avoid an advice gap.
The TSC - which called the FSA's case for Level 4 "weak" - also recommended the FSA provide for flexibility for the 'grandfathering in" of advisers on a case by case basis.
To allow advisers committed to the RDR to continue providing advice to the public, MPs wanted the supervision of non-qualified advisers by Level 4 peers and the regulator until they had reached the new standard.
"We are concerned at any potential loss of competent and experienced advisers from the market. Consumers will not benefit if it results in a reduction in choice and competition through a substantial loss of advisers and firms," the report said.
"We recommend that the FSA temper the ‘cliff-edge' nature of the current reforms. A system of proper supervision, along with the additional year, would provide some leeway, while maintaining the Level 4 requirement."
However the FSA rebuffed the calls from MPs for more time for advisers.
"The FSA remain committed to implementation from January 2013," it said in a statement.
It said there was "clear evidence" the industry is well advanced in its preparations, and that 49% of IFAs were already qualified and at least 82% expected to remain as retail investment advisers.
A copy of the report will be sent to the Treasury.
Caring for children and elderly relatives
Similar to June 2007
Square Mile’s series of informal interviews
Fine reduced to £60,000
Two roles created