Advisers and providers have warned that unintended consequences of the RDR could undermine the whole project.
At a Perspective Financial Group RDR roundtable, Financial Connection managing director and chartered financial planner Jackie Lee-Lis said the inability to advise lower-income clients was the biggest concern with the RDR.
Lee-Lis said: “There is a sector of our client base that in future we will not be able to service. Some of those I helped 20 years ago are some of my best clients today. Even if 10 years down the road those clients never get wealthy, they remember you and keep recommending you. I am very scared of losing all of that.”
Vanguard head of sales Neil Cowell said the biggest concern is providers trying to get round the new distribution rules.
He said: “I worry particularly with restricted advice that perhaps ways will emerge of encouraging distribution flows. This certainly will not be within the spirit of the RDR but it may technically be within the letter of it.”
Nucleus IFA account director Darren Lowry said: “The big fear is ongoing regulatory pressure on IFAs, which stops them getting on with their job. IFAs in general are resilient but the regulatory burden will be a challenge.”
However, Aifa policy director Chris Hannant said he hoped the RDR would achieve at least one of its stated aims.
Hannant said: “ My fear is that, in the extreme, we go through all this aggro and it damages the client relationships, undermines the sector, and the disruption caused negatively impacts the future of advice.”