Gummer points to long decline in consumer access to advice
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Aifa chairman John Gummer believes the RDR will fail to improve the financial advice market if it does not increase consumer access to advice.
At the Aifa annual dinner last week, Gummer warned that consumer access to advice has been declining over the last 20 years, due to falls in the number of IFAs.
He said: “The retail distribution review provides a huge opportunity for improvement and restoration of the savings culture but it is only able to do that if it increases consumer access to independent financial advice.
“The number of customers getting advice has declined because the number of people giving advice has declined. We are increasingly looking at an industry which, by the nature of things, advises those who are better off and those who are less well off do not have the help they would have had 10 or 20 years ago.
“Of course, it is better to raise the standards but to raise the standards in a way that excludes large numbers of people seems to be a very serious issue.”
Gummer called on the FSA to offer regulatory incentives to firms which are less of a burden on the regulator in terms of the level of supervision that they require.
He said: “The FSA should help firms to meet the cost of change under the RDR by offering lower fees to better firms. If you do well, you should pay less, if you cost the regulator more, you should have to pay more.”
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