Initial fees for independent advice are cheaper than restricted advice, according to FCA data.
The regulator has released statistics from its review of advice suitability earlier this year.
Based on a sample of around 700 files, independent advisers charged an average of 2.81 per cent up front. Restricted advisers charged average initial fees of 3.57 per cent.
However, ongoing fees for independent advice were higher than for restricted advice.
Average independent advice ongoing fees were 0.72 per cent, while restricted advisers charged an average of 0.63 per cent.
Initial charges fall by pot size, according to the FCA.
Pots of less than £50,000 face average initial charges of 3.4 per cent, falling to 1.5 per cent for amounts between £150,000 and £199,999, according to a sample of 590 files.
The FCA also released a series of indicators by which it would judge whether or not last year’s Financial Advice Market Review had been a success. The project had the aim of improving access to advice and led to 28 recommendations for the industry.
The regulator’s “baseline measures” on how they will judge the market will include:
- Demand side
– Numbers of consumers using advice and guidance and different channels used
– Use of workplace advice and guidance
– Reported reasons for not taking advice
– Consumers’ willingness to pay for advice
– Consumer levels of engagement
– Levels of satisfaction with advice and complaints data
- Supply side
– Number of advice firms and advisers
– Number of independent/restricted firms
– Minimum investment/pension pot size advised on
– Adviser charges – Industry views on the clarity of the regulatory
– The extent to which firms are offering different types of services e.g. automated advice
The FCA has opted to push back its post-implementation review of the RDR scheduled for this year so that it can take into account the FAMR recommendations and incoming regulation such as Mifid II while reducing the reporting burden on the industry from separate reviews.