Kellard says that because of commission, consumers have become used to seeing advice as free.
Kellard says: “For too long consumers have been encouraged by some parts of the industry to view advice as free, lost in a myriad of charges, which has helped diminish its value, and in so doing devalue the role of a financial adviser.
“At last we appear to be developing a new retail distribution framework, that positions professional advice as a valued commodity, with consumers’ interests at its heart.
“By recognising we must have an open and transparent relationship with our consumers as a core principle we can all begin to rebuild our reputation and trust in our industry.”
Kellard also welcomes the new categories of advisers and sales advisers.
He says: “Calling IFAs ‘advisers’ and single-tied and multi-tied distributors ‘salespeople’ would have been no more than playing with words and wouldn’t have delivered benefits to consumers – labels are irrelevant.
“If tied and multi-tied advisers are qualified to, say, QCA Level 4, then it’s advice. As long as this is fully disclosed, and it is clear to the consumer then, arguably they could retain the label of adviser.”
But Kellard remains concerned that the RDR does not address the need to widen access to advice for people purchasing lower premium products and suggests the regulator should look at how adviser remuneration can accommodate this.