The FSA’s retail distribution review risks causing severe consumer detriment by trying to squeeze mid-market IFAs out of the equation, says former Tory Shadow minister Howard Flight.
The ex-Shadow Treasury Chief Secretary says mid-market advisers have been the “stable backbone” of financial services over the last 20 years. He says it appears from the RDR that the FSA has decided it is too much hard work to regulate a large number of small adviser firms so it is looking for ways to “do away with many of them” through changes to remuneration, qualifications and capital adequacy requirements.
He says in his time in a variety of Shadow financial ministerial positions and as deputy party chairman from 1999 o 2005, he has seen IFAs as offering the best service standards in the retail market.
Flight says: “IFAs have proved time and again that they can be relied upon by consumers more than the providers and the big banks and they have been the stable backbone of the retail market. Any policy that risks this section of the market would be very dangerous for the industry and the consumer.”