The head of the FSA’s retail distribution review Amanda Bowe says if the number of IFAs falls, the gap can be filled by primary advisers no longer restrained by price caps.
Speaking at Osney Media’s financial services distribution summit in London this week, Bowe said the RDR feedback statement will not be published until the second quarter of 2008.
She claimed the RDR was not a threat to what she described as the full market for advice and said it may well increase that market.
On primary advice, Bowe said: “It may not represent the most suitable advice or products but it must not result in unsuitable advice or products.”
Describing the proposals for primary advice as still green, she added: “Although primary advice has not worked in the past, that is no reason not to try again. In the past we had product capping which did not work.”
When challenged that the RDR may reduce the number of IFAs, Bowe responded: “I cannot give an answer at the moment because we are doing work on it. We recognise that if you want to raise professional standards, then some advisers may not want to play in this arena and there may be fewer full advisers left.
“If full financial advice declines for these proposals, and we have been told that that will happen, then primary advice will fill in for these consumers.”
Summit reports, p68