Backbench MPs continue attack on the RDR
Backbench MPs have continued to express deep concerns over the impact of the RDR in a debate in Parliament this morning.
The Westminster Hall debate, secured by Conservative MP Harriett Baldwin, had 13 MPs speak to support of constituent concerns about the RDR.
Baldwin said the RDR is likely to reduce access to finance in rural areas and hit sole trader IFAs hardest.
She said: “In London, for access to financial advice it does not really matter if one person goes out of business there will be lots more financial advice available but in rural constituencies it will have a significant impact.”
She added: “Experienced IFAs, who are often sole practitioners are going to find it hardest to take the time required to pass these specified exams.”
Baldwin said that this was the first time the regulation of financial advisers has been debated in the house of commons. “You have to ask why,” she said.
Other concerns raised during the 30 minute debate included the cost to consumers and the reduction of access to advice for smaller investors.
Treasury select committee member and Conservative MP Mark Garnier asked Baldwin to work with him to secure a backbench business debate so the issue could be debated in the main chamber.
Treasury financial secretary Mark Hoban said members should support the objectives set out by the RDR.
He said: “The current minimum financial adviser qualification is at the same level as a diploma in shift management offered by McDonalds. The products that are being sold by IFAs are infinitely more complex and long lasting in their effects than a Big Mac.”
Hoban added: “Investment advice will be seen as a professional activity, financial advisers will have a new status and I believe fresh talent will be attracted to the industry.”
He said: “The FSA report that rather than being put off by study many financial advisers are going on to obtain more advanced qualifications than those required by the RDR.”
He acknowledged that people have concerns about meeting the new minimum standards but, he said, with two years to go until RDR comes in half of advisers already meet them.
He said: “Many financial advisers feel that should be grandfathered so that those advisers with experience are exempt, the question is how do we know how good those advisers actually are?”.