View more on these topics

Andrew Tyrie: RDR advice gap risks consumer detriment

Treasury select committee chair Andrew Tyrie has raised concerns that the advice gap resulting from the RDR poses a risk of consumer detriment.

Speaking at the Apfa annual dinner in London last night, Tyrie said there is “now a risk, possibly a considerable risk, of consumer detriment” as a result of the “marked” reduction in adviser numbers and the number of providers which have left the advice market since the RDR.

But he said it is too early for the Treasury select committee to review the impact of the RDR.

He said the committee recommended the FCA carry out regular reports on levels of saving through independent advice and adviser numbers following the introduction of the RDR, and intends to hold the regulator to that.

But Tyrie said: “Should the TSC restart the investigation? Not now.

“The RDR has only been going for about a year, and it will take at least two years for the full impact of the changes to work through the profession. And in any case, the FCA is carrying out its thematic review of the RDR and I think we need to see that.”

Tyrie also hit out at the regulator for relying too heavily on “mindless data collection” to “mind its back”.

He said: “We have far too much box ticking and mindless data collection and absence of the use of judgment by regulators in demanding information from the regulated community.

“That really has to end. We have to have more intelligent reporting requirements, and we have to use judgment to identify risk.

“Far too much box ticking has gone on with the view to regulators minding their backs rather than focusing on what they are really trying to look for.”

Tyrie also reiterated the TSC’s call for a freeze on regulatory levies for existing regulator responsibilities, and emphasised the importance of competition and innovation in creating a well-functioning market.

He said regulators do not want to see more competition, “whatever they say”, because they want “less uncertainty about the regulated community”.

He said that on competition, the FCA’s “spirit is willing, but its flesh is a little weak”.


News and expert analysis straight to your inbox

Sign up


There are 6 comments at the moment, we would love to hear your opinion too.

  1. Do not fear. I remember asking hector Sants if this would happen (at the ABI 2 years ago). He assurred me it wouldn´t.

  2. Once again Mr Tyrie is the voice of reason and common sense !!

    However I do think a review of the RDR in 2 years is way to long, the cracks are already there to see and they are widening by the day.

    And its interesting to hear his view on competition, and it seems the FCA are just going to push on, saying the right things along the way but doing the opposite !

    Will the FCA listen ?

  3. “…..And in any case, the FCA is carrying out its thematic review of the RDR and I think we need to see that” – Well at least that will be an independent review on itself. Thank goodness we have a regulatory system that is so robust. I for one will sleep better tonight.

  4. I attended that dinner and listened first hand.

    I always worry when listening to politicians; fearing that they are playing to the gallery. However much of what Mr Tyrie said was encouraging and (unusually for a politician) had much common sense about it.

    However there were still the crocodile tears. While lamenting the lack of saving he took the general view and that held by the regulator that tweaking things to improve the situation was down to regulation and the adviser community. WRONG. It is down to the Government.

    In today’s paper we see Tidjane Thiam and Katherine Garret-Cox calling for the ISA limit to be raised to £20k. But in the last few weeks we have seen ideas floated from Westminster that the limits and benefits of these vehicles will be reduced. Pension saving is constantly being tinkered with – to whose benefit? Our rules adroitly abrogate their responsibility in this matter by fondly believing that AE will solve the problems and in the process turn business into benefit agencies.

    The idea that those who currently do not save will suddenly rush off and become keen stock market followers is fatuous in the extreme. The target audience to whom our ‘bleeding hearts’ refer have not seen a pay rise in 4 or 5 years. Inflation has made life harder for them. True the mortgages are cheaper, but the same cannot be said of all the taxes they have to bear and the increase in the essentials, such as fuel and power. By any measure we are the highest taxed nation in the OECD – with the joint lowest State Pension (a distinction shared with Mexico).

    By all means encourage those who have the wherewithal and the desire to save and invest – instead of constantly hammering them. After all it is the overall level of saving and investment that counts and what is the betting that the better off contribute the lion’s share. As indeed they do when it comes to tax. The highest-earning 1 per cent of Britons pay almost 30 per cent of all income taxes, according to research the 308,000 on the 50p top rate – who earn more than £150,000 – pay £47billion a year to the Treasury.

    Since 2000, the share of tax paid by the highest earners has risen from 22.2 to 27.7 per cent. Research by Oriel Securities shows the 3.7million who earned more than £35,000 and pay 40 per cent tax, hand over £57billion in tax, 34 per cent of the total.

    Our politicians still rely on people spending what they don’t have to drive our bubble laden economy. The prudent fund the feckless at considerable detriment to their efforts. Spending can be curtailed and saving encouraged for the less well off by the simple expedient of credit control. Make all purchases subject to a minimum cash deposit of 25% or 30%.

    So please – if you want to address the problem ‘fess up’ and admit that the solution must come from the dozy 600.

  5. Waiting for 2 years is far too long. A lot of people would like to access advice now but cannot afford upfront fees. With high energy bills , and normal living costs rising above pay individuals are just not prepared to for advice even if they can afford to pay a monthly pension . Common sense should prevail the FCA should allow commission but capped at a certain level that way individuals will be able to save with an upfront fee being charges

  6. “We have to have more intelligent reporting requirements…” And APFA’s blueprint for a simplified, steamlined, less burdensome, less time-consuming, less mindless, more intelligent and more practical reporting process is………..what exactly?

Leave a comment