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FCA chief says advice gap not just caused by RDR

The FCA has questioned whether the RDR is to blame for the advice gap as FCA figures reveal a further 23 per cent fall in the number of bank and building society advisers post-RDR.

FCA figures published this week show the number of bank and building society advisers between 31 July 2013 and 10 January 2014 fell from 4,604 to 3,556. This is on top of a fall of 4 per cent in the first half of 2013, and compares to the 8,658 bank and building society advisers operating as at the end of 2011.

The number of financial advisers rose by 1 per cent between 31 July and 10 January, from 21,684 to 21,881. This is likely to reflect more advisers achieving QCF level four during the year.FCA chief executive Martin Wheatley said it is “difficult” to say the advice gap was caused by the RDR.

He said: “An advice gap stems from all sorts of things, like Government policy.

“There has been an underlying decline in the use of advice and the level of savings and investment.”

FCA long-term savings and pensions director Nick Poyntz-Wright said: “There is some evidence that saving levels were already reducing in the years leading up to the RDR.”

The FCA will carry out research this year on the extent to which the advice gap has led to consumers failing to invest.

Informed Choice managing director Martin Bamford says: “If the lasting legacy of the RDR is fewer bank advisers who were really just salespeople that is no bad thing.”

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